(DOHA, QATAR) — Qatar-based Silatech and Ibdaa Lebanon have announced the launch of two new loan products specially developed to help young entrepreneurs start and expand businesses in Lebanon.
Expected to create over 2,000 additional employment opportunities for Lebanese youth over a three-year period, both loans will be phased in gradually at six
Ibdaa branches.
While Silatech is a regional social initiative that works to create jobs and expand economic opportunities for young Arabs, Ibdaa is a leading Lebanese microfinance institution.
Through the Mashroui (My Project) loan product, Silatech and Ibdaa will provide an early-phase loan to help young entrepreneurs finance their startup businesses. The Shabab (Youth) micro loan product is designed to help finance the expansion of already-existing businesses.
Both products target 18-35-year-old Lebanese entrepreneurs who have businesses in operation for less than six months.
The launch of Mashroui and Shabab follows the signing of an April agreement between Silatech and Ibdaa Lebanon to jointly finance a Youth Loan Fund and collaborate on financial and non-financial products and services for Lebanese youth.
In addition to providing loan capital through Shabab and Mashroui, Silatech and Ibdaa are delivering enterprise training and financial literacy education to help young entrepreneurs sustain and grow their businesses.
Earlier in 2015, Silatech conducted a two-day “training of trainers” workshop for Ibdaa Lebanon credit officers, outlining effective communication and marketing techniques for Ibdaa to attract younger clients, as well as relevant criteria to consider when assessing risk among prospective youth clients.
Access to finance is a major stumbling block for young, would-be entrepreneurs in the Arab world. According to the World Bank, young people in the Middle East and North Africa region have the world’s lowest levels of financial access.
The region also has the world’s highest rate of youth unemployment, topping 30% in 2015.
While lower than the regional average, Lebanon’s youth unemployment rate of 21% is still markedly higher than the global average of 13%.
Silatech acting CEO Mohamed al-Naimi said, “Specially-designed loan products such as Mashroui and Shabab provide much-needed access to new financing and business support services for young entrepreneurs who are important job creators of the future, while also opening profitable new markets for financial institutions.”
“The Youth Loan Fund will aim at answering the needs of both existing business owners through the Shabab loan and startups through the Mashroui loan,” said Bachar Kouwatly, CEO of Ibdaa Lebanon, adding that the partnership with Silatech is part of a global youth-focused co-operation between Silatech and the Arab Gulf Fund for Development’s affiliates in the region.