Guarantees for Loans to Small and Medium Enterprises

About us

What is Kafalat

Kafalat is a Lebanese financial company with a public concern that assists small and medium sized enterprises (SMEs) to access commercial bank funding. Kafalat helps SMEs by providing loan guarantees based on business plans / feasibility studies that show the viability of the proposed business activity.

It processes guarantee applications for loans that are to be provided by Lebanese banks to SMEs operating throughout Lebanon under the Kafalat programme.

Kafalat targets SMEs and innovative start ups that belong to one of the following economic sectors:


  • Industry
  • Agriculture
  • Tourism
  • Traditional Crafts
  • High Technology


Loans guaranteed by Kafalat benefit from interest rate subsidy. These subsidies were set up to mitigate the crowding out effect of the high interest rates in Lebanon induced by public sector borrowing. Interest rate subsidies are financed by the Lebanese treasury and administered by the Central Bank of Lebanon.


Serving Borrowers

Kafalat loan guarantees are issued based on the viability of the business project to be financed. The guarantee that is made in favor of the lending bank, allows the borrower to provide the bank with collateral, which makes the loan safer for the bank. With the Kafalat loan guarantee, the bank may require less complementary collateral for the loan. In fact, Kafalat offers some types of guarantees that explicitly require the lending bank not to impose any additional collateral request on the borrower. The final decision (and the conditions) for granting the loan rests however in the hands of the lender. Kafalat constantly urges banks to waive complementary guarantees/collateral and settle for a credit decision based on a business plan and the project feasibility/viability.

Subsidy for interest on the loan: In addition to the guarantee, the borrower benefits from a subsidy on the interest that is being charged by the bank. This allows SMEs to access bank funding at a reasonable cost.


Serving Lenders (the banks)

For banks, Kafalat loan guarantees reduce the lending risk.

In addition, Kafalat guaranteed loans in Lebanese Pounds benefit from a Central Bank exemption of the statutary reserve requirement. This significantly reduces the lending bank's cost of capital, allowing lending at lower interest rates.


Serving the Lebanese Economy

The Lebanese private sector is dominated by small and medium sized enterprises that face difficulties in accessing classical commercial bank funding. Kafalat loan guarantees bridge that gap for SMEs in Lebanon by making possible otherwise inaccessible commercial bank financing. This allows SMEs to increase the financing of their business activities, which leads to increased domestic investment, output, and employment.


Ownership of Kafalat

Kafalat (SAL) is owned by the National Institute for the Guarantee of Deposits (for 75%) and fifty Lebanese banks (for 25%)




Dr. Khater Abi Habib

Chairman of the Board of Directors / General Manager

National Institute for the
Guarantee of Deposits

Mr. Ghassan Assaf


National Institute for the
Guarantee of Deposits

Dr. Wassim Chahine


National Institute for the
Guarantee of Deposits

Mr. Jamal Mansour


Banque Libano- Francaise SAL

Mr. Walid Naja


Fransabank SAL

Dr. Georges Achi


Banque Audi SAL -
Group Audi Saradar