IFC and Fransabank Supporting Job Creation in Lebanon
IFC, a member of the World Bank Group, seeks to promote private sector led growth in order to support job creation and inclusive growth. In this context, an important priority of IFC in Lebanon is to support small and medium enterprises (SMEs). In...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
International Finance Corporation, Washington, D.C.
2017
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| Online Access: | http://documents.worldbank.org/curated/en/506601489644678513/IFC-and-Fransabank-supporting-job-creation-in-Lebanon-case-study http://hdl.handle.net/10986/26442 |
| Summary: | IFC, a member of the World Bank Group,
seeks to promote private sector led growth in order to
support job creation and inclusive growth. In this context,
an important priority of IFC in Lebanon is to support small
and medium enterprises (SMEs). In Lebanon, SMEs represent 97
percent of the total formal enterprises, employ more than 51
percent of the working population, and are mostly
family-owned. Supporting Lebanese SMEs is therefore an
important mechanism for increasing employment opportunities,
and improved access to finance for SMEs is an essential
factor allowing SMEs to grow. As part of its activities in
Lebanon, IFC partners with local banks and other financial
institutions to (i) broaden their networks and facilitate
greater outreach to SMEs; and (ii) offer innovative products
that expand financing options for SMEs. Fransabank and IFC
have had a long-standing relationship dating back to the
1990s. In 2007, IFC supported Fransabank under the Lebanon
Rebuild Program with two facilities including a risk-sharing
facility to support the bank’s lending to SMEs. IFC’s
counter-cyclical support not only provided liquidity but
also helped restore investor confidence in Lebanon and its
private sector in a post-conflict situation. Measuring the
impact of IFC’s investment and advisory activities can be
complex. With the idea of quantifying job creation through
financial markets investments in Lebanon, IFC and Fransabank
have undertaken this in-depth study. The key objectives of
the study are: (i) to measure the job impact on SMEs from
increased access to finance; and (ii) to understand the
broader development outcomes facilitated by engagements in
the financial sector. The results are based on a survey
implemented in March 2013, which sampled 73 companies that
received loans from Fransabank during 2008 and 2011. The
enterprises ranged from very small to medium firms in the
service, agribusiness, and manufacturing sectors across the
five regions of Lebanon. While it is difficult to draw any
definitive conclusions from these findings, the results
validate that SMEs are vital and have the potential to
contribute significantly to job creation. The findings
should also encourage financial institutions like Fransabank
to continue supporting SMEs through financing and other
services to promote sustained job growth in Lebanon. |
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