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Subsidized interest loans in Lebanon reach $2.71 billion

19 March 2010

BEIRUT: Figures released by the central bank show that the cumulative amount of subsidized interest loans to productive sectors in Lebanon reached $2.71 billion from 1997 until the end of September 2009, as reported by Lebanon This Week, the economic publication of the Byblos Bank Group.

The industrial sector accounted for $1.6 billion, or 59 percent of the total, followed by tourism with $797 million (29.4 percent), agriculture with $255 million (9.4 percent), specialized technology with $58 million (2.1 percent) and handicrafts with $1 million (0.1 percent). Subsidized interest loans extended in 2008 totaled $472 million compared to $248 million in 2007.

Subsidized medium and long-term loans reached $1.79 billion, or 66.3 percent of the total at end-September 2009. Industry accounted for 59.4 percent of the total, followed by tourism (34.9 percent), agriculture (4.4 percent) and specialized technologies (1.3 percent).

The program was established in the first quarter of 1997 and consists of a 5 percent to 7 percent subsidy on the interest for loans extended in foreign currencies to productive sectors.

Also, subsidized interest loans guaranteed by the Kafalat Corporation totaled $608.6 million, or 22.4 percent of the total. Industry accounted for 53.2 percent of Kafalat -backed subsidies followed by agriculture (27.9 percent), tourism (15.8 percent), special technologies (3 percent) and handicrafts (0.2 percent). Kafalat provides financial guarantees for loans of up to $400,000 for small and medium-sized enterprises in productive sectors.

Furthermore, interest subsidized under the protocol signed with the European Investment Bank totaled $146.3 million, or 5.4 percent of the total, with industry accounting for 53.3 percent of the total, followed by tourism (34.4 percent), specialized technologies (10.9 percent), and agriculture (1.4 percent).

In addition, subsidized interest loans granted by leasing firms totaled $81.6 million at the end of September 2009, or 3 percent of the total, with industry accounting for 97.2 percent, tourism 2.7 percent and specialized technologies with 0.1 percent of such subsidies.

Subsidized interest loans by the International Finance Corporation totaled $62.4 million, or 2.3 percent of the total, with industry accounting for 73.7 percent, tourism (18.4 percent) and agriculture (7.9 percent).

Finally, subsidized interest loans to finance working capital totaled $10.3 million, or 0.4 percent of the total with tourism accounting for 100 percent of the total while subsidized interest loans granted by the French Development Agency totaled $4.7 million, or 0.2 percent of the total with industry accounting for 100 percent of the total. – The Daily Star

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