Leading Lebanese microfinance institution, Ibdaa Lebanon, and Silatech, a regional social initiative, have launched 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, said a statement.

Through the “Mashroui” (“My Project”) loan product, Ibdaa and Silatech will provide an early phase loan to help young entrepreneurs finance their startup businesses, it added.

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, it added.

The launch of “Mashroui” and “Shabab” follows the signing of an agreement between Ibdaa Lebanon and Silatech in April, to jointly finance a Youth Loan Fund, and to collaborate on financial and non-financial products and services for Lebanese youth.

In addition to providing loan capital through the products, Ibdaa and Silatech are delivering enterprise training and financial literacy education to help young entrepreneurs sustain and grow their businesses, said the statement.

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, and 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 (Mena) region have the world’s lowest levels of financial access.

Additionally, the region has the world’s highest rate of youth unemployment, topping 30 per cent in 2015. While lower than the regional average, Lebanon’s youth unemployment rate of 21 per cent is still markedly higher than the global average of 13 per cent, it added.

Mohammed Al Naimi, acting CEO, Silatech, said: “The specially-designed loan products 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.”

“Silatech’s record throughout the region shows that youth enterprise financing can be a win-win proposition for both young people and innovative financial institutions,” he added.

Bachar Kouwatly, CEO of Ibdaa Lebanon, said: “Each of the products will include tailored financial and non-financial components in line with the young entrepreneurs’ constraints and aspirations.”

Ibdaa Lebanon is a social business initiative of the Arab Gulf Fund for Development (Agfund) jointly with socially responsible Lebanese investors aiming to provide adapted and affordable microfinance services throughout Lebanon.

Silatech is a regional social initiative which works with partners throughout the Arab world to help young Arabs find jobs and start businesses; it is the largest provider of youth-focused microenterprise services in Mena region. – TradeArabia News Service