(MEBG) – Doha Bank and the Bank of Beirut (BOB) signed, on July 17, a loan agreement for the purchase of Lebanese property. As reported by the Gulf Times, the BOB will finance housing projects in Lebanon— a recently highly prospering sector – whereas the Doha Bank will be responsible for administrative tasks such as account openings and direct debit handling.
The new loan facility will allow customers and investors to purchase Lebanese property without physically needing to be in the country. The offer will be available to Qataris, Lebanese, and other Arabs who are legally allowed to purchase Lebanese real estate.
The loan is based on an 11 percent annual interest, whose face value must be repaid over seven years. The minimum and maximum loan amount will be $25,000 and $100,000 respectively, and will be available to working individuals as well as to the self-employed.
As opposed to bank loans in other parts of the world that require some form of collateral, the BOB waived that specific requirement, yet demands instead personal insurance. Additionally, Lebanon has recently abolished a heavy mortgage fee, hence making property investment even more appealing.
Lebanese houses widely range in price depending on the rural versus urban location, where a small house in Beirut, for example, is in the price range of approximate $60,000.
It is believed that the loan opportunity will attract many investors to the Lebanese real estate market, which was highly popular among Gulf Arabs prior to the country’s unrest, either for investment purposes or as leisure holiday retreats.
Kharbotli, deputy general manager of Doha Bank expressed eagerness for the new deal and said that "this is the first of its kind mortgage scheme, and is an additional compliment to the historic, friendly relations between the two countries as well as between the two banks.”
According to a BOB official, the loan approval is believed to be completed within two weeks.
With the increasing competition within the banking sector brought about by globalization, the alliance between the two banks will result in economies of scale, greater sector specialty, and is likely to be a step towards better placement in the fiercely competitive banking field.