Why Lebanon  Legal Framework  Kafalat

Kafalat is a loan guarantee company, established by the Lebanese government in 1999 to support the activity of small and medium sized enterprises (SMEs). Kafalat provides financial guarantees for loans granted by commercial banks to SMEs engaged in the following economic sectors:

- Industry
- Agriculture
- Tourism
- Traditional Crafts
- High Technologies

Kafalat currently offers three loan guarantee schemes, where the size of the loan requested has to reflect the needs of the project to be financed.

• Kafalat Basic, with a loan value with a ceiling of 300 million LBP (approx. US$200,000). This scheme guarantees 75% of the value of the loan granted by the bank and the accrued interest during the grace period plus three months.
• Kafalat Plus, with a loan value with a ceiling of 600 million LBP (approx. US$400,000). This scheme guarantees 85% of the value of the loan granted by the bank and the accrued interest during the grace period plus three months.
• Kafalat Innovative, with a loan value with a ceiling of 300 million LBP (approx. US$200,000). It was set up to specifically support innovative start-ups i.e. start-ups which demonstrate the potential to create significant commercial added-value through innovation. This scheme guarantees 90% of the value of the loan granted by the bank and the accrued interest during the grace period plus three months.

- Lending is undertaken trough commercial banks
- Eligible SMEs benefit from an interest rate subsidy, paying 7% per year
- Loans can be repaid over seven years including the grace period.
- Loans can cover the entire range of capital requirements (purchase of raw materials and spare parts; working capital; construction of premises; and purchase of machinery and equipment).

Please click here for more information on Kafalat.