With a $5 million capital, the bank intends to extend small loans to underprivileged citizens; operations to start by mid-2012
The Central Bank has recently approved the establishment of the ‘Bank for the Poor’. The establishment of the bank is an initiative by the Arab Gulf Program for Development (AGFUND) within its efforts in fighting poverty in the Arab world.
Lebanon's branch will be the bank's 28th branch in the Arab world.
The Bank for the Poor will target underprivileged individuals through providing them with loans to develop their small and medium enterprises (SMEs).
AGFUND said that the bank will launch its operations within the coming six months with a capital of $5 million.
The bank would rely on auto-financing to allocate loans. The loans would start from $500 at an interest rate of ten percent. Once a client repays the loan, he could reapply for loans of up to $100,000.
According to Elie Mikhael, the Secretary General of the Higher Council for Childhood at the Ministry of Social Affairs (MoSA), the bank will be funded through investor shareholders. Mikhael said that the Ministry will use the data base which will come up from the recently launched ‘National Poverty Targeting System’ to determine the target clients of the bank.
The Minister of Social Affairs, Wael Abu Faour, had earlier said that the bank’s board will be made up of six, Arab and Lebanese, investors.
AGFUND said that it expects the number of allocated loans to reach 3,000 during the first year of operations, and to increase to 7,500 in the second year, 13,000 during the third year, 25,000 in the fourth year and 35,000 during the fifth year.
The Bank has 27 branches in five Arab countries, including 13 branches in Yemen, ten branches in Jordan, two branches in Bahrain, one branch in Syria, and one in Egypt.
Date Posted: Nov 01, 2011