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2. Access to Credit
2.1 Banks
2.2 Other Sources
2.3 Credit Bureau
In-Country Assessment Information

2. Access to Credit – Strong

Goal –  An efficient, transparent financial sector that provides a broad range of citizens with access to multiple forms of competitive credit so that they can start businesses, build wealth, and purchase property

 

2.1 Banks

Core Question: Are traditional banking services robust and extensive enough to serve the needs of the population to help them build wealth and purchase property? Yes –  Strong, the main strength of the Lebanese economy is the service sector, particularly banking.

 

Access

2.1.1  How easy is it to obtain a bank loan?  Strong – Ranking 42nd out of 142; score 3.4 out of 7

 

Soundness

2.1.2  How sound are the country’s banks? Very Strong – Ranking  12th out of  144; Score  6.2 out of 7

Source: The Global Competitiveness Report 2011-2012   http://gcr.weforum.org/gcr2011/

 

Microlending

Status – Weak, there few microfinance institutions operating in the country.

2.1.3.1         How many microfinance institutions are operating in the country? 5

2.1.3.2         What is the number of active borrowers per institution?

                   ADR                               1,854                   4 diamonds

                   Al Majmoua            36,644                4 diamonds

                   Ameen                         15,468                 4 diamonds

                   Emkan                         5,493                   4 diamonds

                   Makhzoumi               587                      4diamonds

Source: Microfinance Information Exchange   http://mixmarket.org/mfi/country/Lebanon

 

 
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2.2 Other Sources

Core Question:Are entrepreneurs free to raise capital outside the banking system including venture capital and/or by issuing stock in a well-regulated stock exchange? Yes – Strong, a growing  number of Lebanese financiers and bankers are establishing independent and proprietary venture capital and private equity funds.

 

Financial Freedom

2.2.1   How much control does the government exert over financial services? Strong –  Score 60 out of 100 – Limited government control; trend is constant  from previous year

Source: Index of Economic Freedom  2013, Heritage Foundation www.heritage.org/index/country/lebanon

 

Venture Capital

2.2.2    How easy is it for entrepreneurs to find venture capital? Strong – 63rd out of  144; Score 2.7 out of 7

 

Equity Investors

2.2.3    How easy is it to raise money by issuing shares on the stock market? Very Weak –  110th out of  144; Score  2.7 out of 7

Source: The Global Competitiveness Report 2011-2012   http://gcr.weforum.org/gcr2011/

 

 
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2.3 Credit Bureau

Core Question: Is Comprehensive credit information available through public and private credit bureaus? Yes – Strong, but lacks private credit registry coverage.    

 

 

 

 

Overall Ranking:  104th out of  185; Trend      

 

Coverage

2.3.1   What is the depth of information available in credit bureaus? Very Strong –Score 5 out of 6

 

Public

2.3.2   What is the extent of public credit registry coverage? Strong – 16.6%

 

Private

2.3.2   What is the extent of private credit registry coverage? Very Weak – 0%

Source: Doing Business 2013 – Getting Credit, World Bank www.doingbusiness.org/data/exploreeconomies/lebanon

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In-Country Assessment Information (as of August 2012)

FQ 4 How available are mortgage loans for purchasing property, who is the typical user and what are the prevailing trends?

Housing loans have traditionally only been available to the development of new properties. Yet today, several banks have begun offering mortgage loans directly to homebuyers. The Lebanese mortgage market grew to 11.5% of its GDP in 2010 from an average of 4.9% from 2004 to 2007.

FQ 5 What are the interest rates, term and loan-to-value ratios?

Interest rates for housing loans are usually tied to the U.S. prime rate or LIBOR, with a fixed percentage added. The loan-to-value (LTV) ratio ranges from 5% to 85% of the appraised value or actual purchase price of the property, whichever is lower. The term period is usually from 20 to 30 years. Lebanese banks require both life insurance and house insurance from loan applicants.

FQ 6 Are there any informal barriers to borrowing such as for women or minorities?

No, there are no informal barriers to borrowing against women and minorities.

Source: www.globalpropertyguide.com