Guarantees for Loans to Small and Medium Enterprises

Characteristics of the loan

Thu, 04/04/2013 - 16:47 -- admin
program image: 

Characteristics of the Loan

Kafalat Basic guarantees loans with amounts varying between a minimum of LBP four million and a maximum of LBP 300 million.

The loan has to be repaid within a maximum of 7 years. New loan guarantees include a grace period between 6 and 12 months depending upon expected business revenues. During the grace period, the borrower makes no repayment, neither in principal nor in interest.

Kafalat Basic guarantees 75% of the value of the loan granted by the bank plus 75% of the accrued interest during the grace period + 3 months. Thus, the Kafalat Basic scheme covers the repayment of 75% of the outstanding amount to the bank in case of default. However, the borrower is liable for the total outstanding amount and not only the 25% unguaranteed.