Lebanon, July 31
,
2008
— IFC, a member of the World Bank Group, and Grameen-Jameel Pan-Arab Microfinance Limited, a social business, released a study that finds there is strong demand for microfinance in Lebanon and recommends ways to improve access to finance for smaller businesses.
According to
Lebanon: A Diagnostic Study on the Demand for Financial Services by Micro and Small Enterprises
, Lebanon’s microfinance market is relatively small (about $286 million), yet only 11.5 percent of the demand is met by existing financing sources. The study argues that access to finance by the country’s micro and small enterprises can be improved by developing and upgrading existing microfinance institutions, rather than setting up new specialized institutions.
The study is part of IFC’s overall strategy to create a commercially viable microfinance sector in the Middle East and North Africa. It is also part of Grameen-Jameel’s efforts to ensure that demand for microfinance services in the Arab world is met.
There is an urgent need for human resource development in the microfinance sector. Advisory services and training, with a focus on best practices in credit methodology and marketing, are crucial. There is also a need for additional funding to help providers expand their product portfolios and reach in the region, thus increasing access to finance.
The study was funded by IFC and Grameen-Jameel and conducted by the Frankfurt School of Finance and Management, Bankakademie HfB. This initiative is part of an agreement signed with Grameen-Jameel and CGAP (the Consultative Group to Assist the Poor) in May 2007, to help the Lebanese government scale up microfinance and microenterprise development.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
. By the end of December 2007, IFC’s client partners in the Middle East and North Africa had reached more than a million borrowers, with outstanding loans of more than $420 million. IFC has been active in microfinance development worldwide over the past decade and has committed over $500 million to microfinance institutions. These activities have made a difference in the lives of about 3.5 million entrepreneurs.
About Grameen-Jameel Pan-Arab Microfinance Limited
Grameen-Jameel is a for-profit limited company jointly owned by Grameen Foundation and Abdul Latif Jameel Group. The company was founded in March 2007 and incorporated in Cyprus, with a branch office in Dubai’s International Humanitarian City. It is an example of the social business concept pioneered by 2006 Nobel Peace Laureate Professor Muhammad Yunus. The company helps alleviate poverty in the Arab world by forming strategic partnerships with microfinance institutions and providing support through its products, services, and financing. Through its partnerships in Egypt, Jordan, Lebanon, Morocco, Saudi Arabia, Tunisia, and Yemen, Grameen-Jameel has reached more than 200,000 new microfinance clients.
