Guarantees for Loans to Small and Medium Enterprises


The European Union, in partnership with Kafalat SAL, has signed, since July 2004, a series of financing agreements with Lebanese Ministries, to create financing mechanisms for Small and Medium-sized enterprises and to support the innovation and competitiveness of enterprises.


The European Union has identified four priority projects which are at the heart of the of Partnership’s efforts, including projects for:

  • An Integrated SME Support Programme signed in July 2004, with the Ministry of Economy and Trade together with the Ministry of Industry.
  • A Facility in support of SMEs Energy Saving investments signed in August 2010.
  • Credit for Agricultural and Rural Development signed in Dec 2012.
  • A Loan Guarantee Fund for Lebanese SME's signed in Nov 2012.


For the SMEs and Start-ups, this partnership specifically aims to:

  • Ensure access to credit in order to finance sound investment projects, while extending loan periods.
  • Increase and strengthen the equity of SMEs and start-ups.
  • Promote the integration of SMEs and start ups into the formal sector by ensuring that they register themselves formally.


For Commercial banks, this partnership specifically aims to :

  • Increase the maximum amount of loan that can be guaranteed under the scheme (beyond the level offered by Kafalat until 2005).
  • Provide incentives to commercial banks to be less risk averse by basing their lending decisions on the project investment merits, cash flow and market opportunities.
  • Increase the amount of commercial bank lending available.