BDL extends period for subsidized loans
Three more years, no additional Treasury costs
The Central Bank (BDL) is expected to extend the maturity period of its subsidized loans to the industry, agriculture, and tourism sectors, as well as Kafalat guarantees. The amended circular is expected this week, and will not concern any other measures related to these loans.
Three more years will be added to each loan period, increasing it from seven to ten years, without any additional costs to the Treasury. “The main purpose of this measure is to improve the cash flow of clients,” said Wael Hamdan, Head of the Financing Unit at the BDL.
Current borrowers need to apply for this extension through the bank they are dealing with. According to Hamdan, “most borrowers will ask to extend their loan periods in light of the local economic slowdown.”
“Banks are expected to react positively to borrowers’ requests. They won’t refuse any submitted application, especially if the financed project is viable and productive. The only exception concerns clients in big financial difficulties where it would be useless to extend the loan term.”
The BDL is working closely with banks to be more flexible in lending to the private sector. This new measure supports similar BDL initiatives launched earlier this year. These include a $1.4 billion stimulus plan to help grow the economy and promote lending to the private sector.
Reported by Leila Rahbani
Date Posted: Sep 03, 2013