With Vitas, Proparco is supporting entrepreneurs in vulnerable regions in Lebanon
published on 07 December 2020
Proparco has just signed a USD 2.5m guarantee with the microfinance institution Vitas S.A.L. to allow it to develop loans for micro and medium-sized enterprises in the North, Akkar, Bekaa and Beirut governorates, with a focus on young entrepreneurs under 30.
With over 21,000 clients and offices nationwide in Lebanon, Vitas Lebanon is one of the leading microfinance players in the country. The institution is currently seeking to increase access to financing for vulnerable Lebanese people and refugees living in the North, Akkar and Bekaa governorates. These regions are particularly hard hit by poverty and the acute economic crisis which Lebanon is going through. Vitas also aims to further develop access to credit for young people under 30 who often find it difficult to finance their start-ups.
Finally, following the Beirut Port explosions on 4 August 2020, the institution wants to continue to support entrepreneurs in Beirut affected by this disaster.
To reduce the risks taken by Vitas, PROPARCO has set up a risk-sharing mechanism to cover 80% of the loans allocated to MSMEs operating in these four areas, with a focus on young entrepreneurs under 30.
More specifically, it involves an ARIZ SME MINKA portfolio guarantee. This product mainly targets MSMEs in crisis areas. It facilitates access to financing for these companies with high risk profiles in extremely vulnerable situations and covers a significant number of small loans.
“We are proud to be launching the new initiative to support entrepreneurs from microenterprises and medium-sized enterprises with PROPARCO. The current severe economic crisis in the country makes this initiative all the more essential. It is fully in line with the socioeconomic mission of Vitas and its ongoing commitment to the most vulnerable Lebanese entrepreneurs, especially women and young people, to help them become financially independent and improve their quality of life”, said Ziad Halaby, General Manager of Vitas Lebanon.
“We are very honored to be helping Vitas, the leading microfinance institution in Lebanon, benefit from our new ARIZ SME MINKA tool dedicated to entrepreneurship in regions that are vulnerable or affected by the crisis. This new project also demonstrates PROPARCO’s renewed commitment to support the private sector and especially in a context marked by the tragic events that afflicted Beirut and Lebanon in August 2020”, said Xavier Echasseriau, Deputy Director of PROPARCO’s Financial Institutions and Inclusion Division in charge of Guarantees for Development.
