WLN Articles

Shaheen Amin, CEO of Saudi ORIX Leasing Company

Shaheen Amin has over 25 years of experience at ORIX. In 1986 he began with the company in Pakistan as Finance Manager, where he joined as the second employee. After eight years he went to Oman to launch the new ORIX outpost, Oman ORIX Leasing Company SAOG in 1994. In 2001, opportunity knocked again and he spearheaded the first general purpose leasing company in Saudi; this year Saudi ORIX Leasing Company will reach its tenth year of both operation and consecutive profitability. Amin’s career is marked by seizing opportunity and taking intelligent risks.

Saudi Arabia’s leasing history & ORIX
In 2001 Saudi’s leasing market was poised for growth. Amin lead this opportunity and created the benchmark for leasing companies to follow while tackling serious disadvantages that are common to any nascent leasing market.

In 1998 the Saudi Arabian government consulted the World Bank regarding how to diversify its economy considering their over-dependence on oil. Saudi wanted to bring in more small- to medium-sized companies. The World Bank suggested bringing in more specialized companies, like leasing to diversify and grow its economy in a new direction. First however, an approval from the Finance Minister was needed to classify leasing as financial services. Once this was established, ORIX sought licensing from the Saudi Arabian Monetary Agency and they achieved incorporated status.

Saudi ORIX Leasing Company, the first lease financing company of its kind in Saudi was incorporated on January 16, 2001 as a closed joint stock company with a mandate to provide medium term asset financing to all productive sectors of the economy with particular emphasis to serving the needs of small to medium size enterprises and thereby, assist in extending and expanding the credit delivery mechanism. Today they have 130 employees and 5 branch offices throughout the country.

Timing was perfect for ORIX’s entrance into the Saudi market. The government saw the need for the leasing industry’s growth, the World Bank backed them on the sentiment, and as soon as they could legally enter the market, they were incorporated and 8 months later up and running as Saudi’s leasing pioneers. ORIX entered the market as soon as leasing was legally mandated in the country. No other company came before them, ORIX blazed the trail.

Saudi’s population was booming then and still is today. Their focus on growing infrastructure in the medical and education arenas, among others, also helps the leasing industry. There is a general, steady demand for assets and the economy has grown robustly. ORIX is the first specialized leasing company focusing on multiple assets in Saudi Arabia. Since its infancy in Saudi, ORIX has aided other leasing company’s entering the market as well.

Amin spends 20% of his time consulting others in the industry. He’s written feasibility studies for other countries and traveled the world investigating, working and learning the industry. “From a leasing perspective each market has its own nuances,” he said.

Saudi’s exciting potential
In Saudi, ORIX serves an interesting niche. “What is exciting is the potential – so many things are new here,” said Amin. There are many ways to be innovative with the SME market; banks are reluctant to serve this sector. Amin explained, “We’ve taken advantage of that. Banks are happy with the business they have, they are in an oligopoly position – with their focus on large transactions, if it’s less than 15 million they are not interested. This is the niche to serve.” In addition, the banks are very experienced within project finance and have much expertise in this area and thus are very advanced in terms of what they can do. Currently, ORIX is in the process of acquiring a FITCH rating.

ORIX maintains a sophisticated risk management system based on diversification. In terms of business sectors, business size, asset categories, etc. they watch their exposures on many levels. They maintain strict exposure limits so they aren’t writing business in any one particular asset category or sector, too often. This puts constraints on their business but leads to a healthier, well-balanced portfolio.

Unique leasing challenges in a new market
That isn’t to say that the journey has been an easy one. In this conservative market leasing doesn’t typically have the appeal that it has in the States, Asia and Europe. In Saudi, knowing that they lease the asset versus owning it is a physiological barrier for some. “It’s based on a feeling of pride. This attitude can prevent penetration” Amin said. ORIX is working to educate people that money is earned from using the asset, not owning it and that by managing their balance sheet companies can conserve their cash.

Basic manpower is also an issue in addition to the work visa limitations. Amin’s teams in Saudi pride themselves on their employee training, sending employees to Japan for various trainings. They also exceed the Saudi citizen hiring requirement, by almost double the standard set by the government.

Additionally, the absence of approved leasing laws hinders competition. If everyone had to follow the same guidelines, it may assist in leveling the playing field. Amin expects legislation on this within a year.

View of competition and the future
Amin spoke about competition in this younger market, when a market is growing additional new companies help to expand the market, but that only goes so far, once competition begins taking place you need to have a competitive edge in terms of servicing or pricing. “Keep a sharp eye on competitors to safeguard your space in the market. ORIX practices an ongoing process at providing a competitive and economic service to our customers” he said.

What Amin likes best about the industry is also a common trait within himself – resiliency. “In the face of changing tax rules and accounting requirements leasing has survived diluted tax benefits. Leasing as a product is very versatile and has assisted thousands small and medium sized enterprises all over the world. As a product, leasing provides solutions for a large asset like a ship or a plane under tax driven structures where necessary, or smaller assets as well,” he said. Amin shows resiliency and adaptability by working in various leasing industries in the Middle East. Each country’s market, needs, nuances and challenges differ, and Amin matches every opportunity with hard work and tenacity. The ORIX brand is highly respected in the industry, going back to 1964. It makes perfect sense that a devoted industry veteran, like Amin, with a solid work ethic and the ability to see the “big picture” would find success at ORIX no matter what corner of the planet calls for his leasing expertise.