Lebanon encourages borrowing and investment
The Lebanese Cabinet has drafted a law to encourage more small and medium-size companies to borrow and invest. The proposal will triple the size of loans that may be backed by Kafalat, the organization that guarantees 75 percent of the value of small loans, from LL100 million to LL300 million ($199,000). It will also permit Kafalat to back loans to companies that employ up to 40 people, twice the current limit.
Kafalat guarantees small loans for companies in industry, technology, tourism, agriculture and crafts. The government has also exempted commercial banks from 60 percent of the deposit they are required to make at the Central Bank when extending a Kafalat-backed loan. Finance Minister Fouad Siniora said 11 banks have already extended loans guaranteed by Kafalat and 11 more are preparing to do so. Kafalat has received 131 loan applications, mostly for agricultural and industrial projects. The new law is currently being studied by Parliament. — ( Lebanon Invest )
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