According to the most recent Enterprise Survey conducted in Lebanon by the EIB, the World Bank and the EBRD, nearly one quarter of firms are credit constrained. This is likely to impact significantly on job creation and growth in a country that is host to 1.5 million refugees, equivalent to some 30% of its population.

In response, the EIB is providing a EUR 270m credit line to four Lebanese banks to enable them to lend more to local SMEs and mid-cap companies. It is estimated that some 20 500 jobs will be supported by this lending, with an expected 250 SMEs and 20 mid-cap companies benefiting from loans of around ten years’ duration on average. Furthermore, the credit line will help to improve the resilience of the Lebanese financial system, and thus the economy, by helping banks to diversify funding away from short-term deposits that currently make up 90% of their resources, helping them in turn to better support the growth-enhancing investments of Lebanese businesses.

Complementing other EU initiatives in the context of the refugee crisis, the project also involves a refinement of eligibility criteria, rules and procedures to encourage banks to channel part of the funds provided towards projects specifically concerned with the needs of refugees.