Cost of the Loan

Interest

Kafalat Agriculture guaranteed loans may be granted in either Lebanese Pounds or US Dollars, or any other foreign currency.

Loans taken in Lebanese Pounds (LBP) will be charged the following interest rate:

Interest Rate = 1-year Treasury Bill's Yield (TBY's) +3%

Loans taken in Foreign Currency (e.g. USD) will be charged the following interest rate, according to the Sub-Programme:

Kafalat Small Agriculture:

Interest Rate = 1 year Libor + 5.5% + 7.5% of FFR (Upper Limit of the Federal Fund Rate

Kafalat Trees:

Interest Rate = 3% + 50% of FFR (Upper Limit of the Federal Fund Rate)

Subsidy

The interest subsidy is the same as for all subsidized loans, currently at 4.5%. The duration of the subsidy is maximum 7 years, beyond which the Central Bank will no longer subsidize the interest.

Kafalat Fee

The Kafalat fee is a 2.5% yearly commission of the outstanding value of the guaranteed. The value of the guarantee is 75% or 85% of the loan value approved by the bank and Kafalat.

Fiscal stamps are charged once on the Letter of Guarantee and are calculated at 0.4% of the value of the guarantee.

Therefore, the final cost at Letter of Guarantee issuance would be equal to:

[(Loan Value + interest accrued during grace period + interest accrued for 3 months] x (75% or 85%) x 2.5%) + [(Loan Value + interest accrued during grace period + interest accrued for 3 months) x (75% or 85%) x 0.4%]

Additional Fees

A one-time file fee (maximum 400,000 Lebanese Pounds) might be charged by the bank, and is invoiced to the client. Rejected loans do not pay any fee.