The growth of micro-finance in Lebanon

Find out how in just a few years, the microfinance market in Lebanon has evolved.

In Lebanon, it is very difficult to get a loan to start his business without collateral (a piece of land, for example) through traditional banking networks.

The poorest population was long denied from access to financial services. 6 years ago, the International Finance Corporation found that the microfinance sector in Lebanon comprised just 11 Microfinance Institutions (MFIs) with a total outstanding loan portfolio of $33 million.

Today, the size of the microfinance sector has quintupled since 2007. There is now twenty MFIs in the country and five of the top MFIs have now a combined worth of $62 million.

Five institutions in the region including Al Majmoua,MicroWorld partner in Lebanon, published their information on the Mix-Market (non-profit website containing information on MFIs). These appear to be self-sufficient, meaning they are able to cover all of their expenses from revenues.

However mistrust clients for microfinance institutions have forced to undergo audits to assess the social achievements of MFIs such as the number of loans given to women etc.

These assessments are used to demonstrate that MFIs effectively improve the welfare of its clients and their families.

Al Majmoua was therefore subject to the evaluation of Planet Rating (one rating agency specializing in microfinance). This institution pointed out in 2010 that the MFI demonstrated a true social commitment to its customers and that Al Majmoua had a real positive social impact on the region.

Indeed, Al Majmoua provides individual and group loans to contractors and workers with low incomes. Group loans are targeted at women and work on the principle of group solidarity and then eliminate the need for guarantees which is often prohibitive in the application of a conventional loan.

Clients of this type of loan have everything to gain from seeing the market evolve in this direction, but it all depends on the willingness of the IMF to engage with borrowers to help them in their projects.

Now they can also count on you! With MicroWorld you can help the Lebanese micro-entrepreneurs to start their business! (see projects in Lebanon)

Source : Executive

Tags : microfinance, MicroWorld, Lebanon, Al Majmoua, microcredit