One of the most important initiatives to finance entrepreneurship is micro-credits.
Fransabank has developed a strategy of Corporate Social Responsibility based on responsible actions and economic efficiency, with the willing commitment to the socioeconomic development of the people and the region. In this vein, the Bank adopted and implemented an aggressive micro financing approach helping to forge progress in eradicating poverty.
This is achieved through well-perceived business venue that mandates dedicating specialized teams who conduct one-to-one business field visits to potential and existing beneficiaries. The team members are intentionally selected from the suburban areas. They know exactly the needs and wants of the community. Moreover, we provide them with training to promote development ethics based on rigor, creativity, understanding and respect for the rural environment. The team members are always in direct contact with the NGO’s operating in the rural areas and ensures sustainable development and optimal results.
In addition, to reward our loyal micro-credit customers, and to enrich women empowerment, we have selected, in 2014, 25 small businesses across Lebanon based on well-studied key performance indicators and rewarded each one with a USD 1,000 grant. The winners spanned sectors ranging from manufacturing and construction to health, wellness, food, and hospitality.
The key performance indicators for our micro-credit beneficiaries of the USD 25,000 total grant:
- Sustainability of their business, minimum five years in the business
- Growth and profitability
- Expansion of their business activities
Empowerment of female entrepreneurs, whereby the selection process of the winners was based on having more women than men.
Souad's Success Story
Can small-scale lending make a difference to the world? At Fransabank, we believe so wholeheartedly. In this vein, our Bank adopted and implemented an aggressive micro financing approach helping to forge progress in eradicating poverty. Fransabank “Ameen” and “Maan” micro credit loans, as well as "Najah Loan" were launched as part of the Bank’s commitment to the balanced development and growth of the economy through support to low-income individuals. This is achieved through well-perceived business venue that mandates dedicating specialized teams who conduct one-to-one business field visits to potential and existing beneficiaries. The team members are intentionally selected from the suburban areas. They know exactly the needs and wants of the community. Moreover, we provide them with training to promote development ethics based on rigor, creativity, understanding and respect for the rural environment. The team members are always in direct contact with the NGO’s operating in the rural areas and ensures sustainable development and optimal results.
Specifically targeting areas outside the capital, such as the Bekaa, the South, the North, Mount Lebanon and Jbeil, “Ameen” and “Maan” micro credit loans offer flexible conditions that enable individuals to develop their own small-scale businesses or improve and expand their existing ones.
Spreading the Wealth
When Fransabank launched its Maan micro-credit program in 2008 it made a promise to offer loans in the form of full grants or at 0% interest. This promise took shape in 2009 with details announced at a press conference held in collaboration with JADCO, the Association of Mayors of Byblos Towns and "Ameen" company. During the press conference, the first 100 beneficiaries of Fransabank’s promise were named: 25 of these received their micro-credit loan in the form of a grant (reaching a total value of LBP 37,500,000), while the other 75 received their loan with 0% interest (with an accumulated value of LBP 112,500,000).
Fransabank took the opportunity of the press conference to announce its plans to build on this initial phase. The Bank promised that the recipients in Jbeil would act as a role model for micro-finance beneficiaries in other remote areas across the country. Fransabank succeeded to expand this generous and groundbreaking initiative to other Lebanese regions as part of its strong commitment to “spread the wealth” and to help as many individuals as possible regardless of their location.
Following the same strategy of the commitment to the national economy, Fransabank was compelled to work on the empowerment of women in the community. In this context, the Bank signed a cooperation agreement with the National Commission for Lebanese Women NCLW to provide financial facilities to Lebanese Women. This cooperation agreement resulted in the launch of the first of its kind “women-targeted” loan in Lebanon: “Najah Loan”. This loan allows women to enhance the standards of living of their families through the development of businesses that contribute to the growth of the national economy in the industrial, services, tourism and trade sectors, while benefiting from reduced interest rates and various facilities such as extended grace and repayment periods. The total allocated amount for the “Najah Loan” is LBP 1 billion.
Fransabank received the Social Economic Award 2012 for “Najah Loan” under the category of “Women Empowerment”. The event was organized by First Protocol in collaboration with the Central Bank, the Association of Banks, the Federation of the Chambers of Commerce, Industry, and Agriculture in Lebanon, the Association of Industrialists, and the Lebanese Franchise Association
Small and Medium Size (SME) Enterprises Lending
Fransabank supports companies of all sizes – especially SME’s – in Lebanon by operating a fair and reliable lending policy.
We believe that supporting Lebanese SMEs actively contribute to the increase of employment opportunities and to the development of the private sector in Lebanon. For that reason, Fransabank sustained its efforts in assisting SME’s which are the engine of Lebanon’s economy; constituting 97% of the total formal enterprises employing more than 51% of the working population.(Source: International Finance Corporation Case Study on Women and Youth Employment in SME’s, March 2013).
In this vein, Fransabank and the European Investment Bank (EIB) renewed support for SME’s in Lebanon with a credit line of Euro 45 million to finance the investment projects of SMEs. The EIB funds earmarked for financing projects in the sectors of industry and agro-industry, health, education, high knowledge and services. This was the EIB’s fifth transaction with Fransabank under its policy of supporting the economic development of small and medium-sized companies in order to foster economic recovery and job creation in Lebanon.
The total outstanding amount of Small and Medium Size enterprises financing reached around USD 640.22 million as end of December 2015.
SME Seminars and Workshops
The intense small and medium size loans and economic development initiatives launched by Fransabank are regularly complemented by series of SME’s workshops and seminars, providing consultancy services to our existing and potential customers and following and monitoring the financing outcome.
The objectives of these seminars are to:
- Provide clients with basic information and powerful strategies and skills in banking
- Comprehend the market-based pricing for SME products and services
- Understand how financial products are customized to create financial solutions
- Open platform for any consultancy services
- Explore the Bank’s diverse SME’s products and services
The SME’s seminars have tackled Kafalat Loans, Subsidized Loans, Incentive Loans, Energy Loans, and Green Loans. The workshops are a success and always receive excellent feedback from all attendees.
Equity Investments in Start-Ups - Central Bank of Lebanon / Circular 331
Through the Central Bank of Lebanon’s Intermediate Circular 331, Lebanese banks are encouraged to invest in innovative ready-to-scale startups in the Lebanese Knowledge Economy. Thus, local banks are entrusted with allocating equity funding to its most efficient use by investing in:
- creative young entrepreneurs with innovative ideas
- ready-to-scale start-ups
- venture capital funds with solid management team
In addition to funding, entrepreneurs are offered guidance, strategic mentorship, entrepreneurship-focused business training, access to networks of partners and mentors.
In view of that, Fransabank is among the leading banks to embrace the Central Bank of Lebanon Circular 331 into the Bank’s strategic business activities and has taken a participation in three funds: The Impact Fund by the Middle East Venture Partners (MEVP) Holding SAL, The Leap Ventures and Berytech Fund II.
The Central Bank allowed, through the Circular 331, Lebanese banks to make equity investments in start-ups, accelerators, incubators and venture capital funds, enabling them to expand their business scope and open up new horizons for entrepreneurs, innovators and investors; thus support to young entrepreneurs.
Supporting Business and the Economy
By promoting entrepreneurship, we continue our commitment to furthering Lebanon’s economic growth and supporting small business owners. In 2007 Fransabank pledged USD 1 million to non-governmental organization (NGO) Bader for its Building Block Equity Fund. Bader was launched with the aim of inspiring and boosting the morale of the young generation, providing encouragement and financial support to entrepreneurs, promoting entrepreneurial education and introducing new financial tools to support small and medium size enterprises (SMEs). The Building Block Equity Fund was Bader’s first major initiative to bridge the gap in funding to start-ups and entrepreneurs. Through donations such as Fransabank’s, the Fund was used to invest in Lebanese small and medium size enterprises (SMEs) that demonstrated potential for innovation, in order to help them forge sustainable growth. Fransabank’s commitment to entrepreneurialism has also taken shape through Berytech, in which the Bank is a partner and shareholder. Berytech’s aim is to foster economic growth through providing incubation, support and hosting opportunities to the largest possible number of project holders as well as growing enterprises operating in the fields of technology, multimedia and health. In its own words, Berytech sees its contribution to society as setting into action “a vibrant micro-economy characterized by sharper competitiveness on the national and international levels” as well as offering easier and faster access to funding and enabling Lebanon to become a technological showcase in the region.