Audi in deal to finance SMEs

Ten-year loans to fund startups or expansions

Bank Audi has signed a loan agreement of $20 million with the SANAD Fund for financing micro, small, and medium enterprises . Through this partnership with the Luxembourg-based fund, Bank Audi will expand its lending activities to small and medium enterprises (SMEs) who would receive loans, refinanced through SANAD.

The bank will offer ten-year loans to SMEs seeking to finance operating expenses, or capital expenses, such as purchasing machinery. “Eligible borrowers under this scheme are SMEs with annual sales less than $5 million, as per the Central Bank’s definition,” said Ibrahim Salibi, Assistant General Manager and Head of Corporate and Commercial Banking.

The bank has capped the amount which could be offered per loan at $500,000. “This limit is intended to ensure that the loans are well-distributed among the widest number of beneficiaries possible,” said Salibi.

Projects in all productive sectors are eligible for financing through this scheme. Loans for projects in agriculture, industry, tourism, and Information and Communications Technology (ICT) can benefit from BDL-subsidized interest rates. “With the subsidy these loans will have a fixed interest rate of 3.5 percent for a seven-year repayment period,” Salibi said.

Several lending schemes targeting SMEs have been ongoing lately, including one by the BDL to encourage lending to productive sectors, with an amount dedicated for SMEs. Bank Audi has a good penetration in the sector, according to Salibi: “There is good demand on SME lending and the average amount requested per loan is between $200,000 and $300,000.”

SANAD provides medium- and long-term debt, guarantees, and equity financing to commercial banks and other financial institutions in the MENA region that serve micro, small, and medium enterprises. SANAD and Bank Audi are also looking for partnerships in other countries in the region.