IFC provides Al Majmoua with $2 million loan
To support small businesses and women entrepreneurs
IFC, a member of the World Bank Group, is providing a two million dollar loan to the Lebanese Association for Development (Al Majmoua), a local microfinance institution. The initiative is part of an effort to encourage entrepreneurship and drive economic development in Lebanon.
“The importance of this agreement is that Al Majmoua is one of the largest microfinance institutions locally and reaches a lot of poors,” said Thomas Jacobs, Principal Country Officer at IFC Lebanon.
The loan will help Al Majmoua to grow its loan portfolio and expand outreach to small business owners, including female entrepreneurs, and the poor.
“This agreement with IFC highlights the importance of the microfinance sector in general, and Al Majmoua’s work in particular in improving financial inclusion for the unbanked,” said Youssef Fawaz, Executive Director of Al Majmoua. “This partnership allows Al Majmoua to continue expanding its outreach, helping improve the economic and social conditions of low-income individuals,” he said.
“Most of the beneficiaries of the loans will be farmers, handicrafts people, automotive technicians, and painters among others, but we mainly focus on women entrepreneurs working from home like needlewomen, hairdressers, or women preparing home food in rural, poor areas and suburbs,” said Fawaz. “We grant usually loans to Lebanese and non-Lebanese women, mainly those in Palestinian camps,” he said.
Al Majmoua has more than 46,000 active clients, 54 percent of whom are women. It has been operating since 1994. It has a market share of just under 50 percent.
Lebanon currently has a microfinance penetration rate of about 48 percent, leaving a significant gap to be bridged.
“The microfinance sector proved, in the last two decades that poor clients are good as middle class clients and abide by their financial commitments,” said Fawaz. “Clients are using this money and coming back to ask for bigger loans after growing their business,” he said.
Reported by Leila Rahbani
Date Posted: Sep 25, 2014