Credit incentives for industries on track

Authorities working on low interest loans,
longer grace periods, extended maturities

New measures to encourage industrialists to borrow from banks and invest in their sector are being discussed between the Ministry of Industry and the Central Bank

Minister of Industry, Vrej Sabounjian, said the initiative aims to offer greater incentives and more lending facilities through banks. In December 2011, the Central Bank lowered its subsidy on interest rates for bank loans to productive sectors from seven to 4.5 percent.

“Our aim is to encourage investments in the industrial sector, even within the current instability,” Sabounjian said.

Among the measures discussed is the lowering of interest rates and extending loan maturities and grace periods. These loans will benefit industrialists who wish to expand their businesses, as well as entrepreneurs who want to start manufacturing businesses. “Industrialists could start their projects with small investments and develop their businesses gradually,” Sabounjian said.

Bank of Beirut (BoB) last month launched a new subsidized loan for the industrial sector. The loan amount ranges from $25,000 to $250,000, comes with a grace period of six months, and other payment facilities. Sabounjian encouraged other banks to launch similar loans. “All banks are willing to finance industrial enterprises even with more than $250,000,” he said.

Jacques Sarraf, former president of the Association of Lebanese Industrialists (ALI) said that despite the unstable situation, industrialists still have a need for financing: “Banks are looking for industrial projects they can finance, either to develop already existing projects or starting new ones.”

Reported by Rania Ghanem