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.
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
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