Ibdaa Lebanon, a leading Lebanese microfinance institution, and Silatech 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.

Through the “Mashroui” (“My Project”) loan product, Ibdaa and Silatech 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 2015 agreement between Ibdaa Lebanon and Silatech 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 “Shabab” and “Mashroui,” Ibdaa and Silatech 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, 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. Meanwhile, the region has the world’s highest rate of youth unemployment, topping 30 percent in 2015. While lower than the regional average, Lebanon’s youth unemployment rate of 21 percent is still markedly higher than the global average of 13 percent.

Silatech Acting CEO Mohammed Al Naimi said that “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.”

He added, “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.”

Bachar Kouwatly, CEO of Ibdaa Lebanon, stressed the importance of this initiative for the Lebanese entrepreneurial youth, and said: “The Youth Loan Fund will aim at answering the needs of both existing business owners through the ‘Shabab’ loan, and start-ups through the ‘Mashroui’ loan. Each of the products will include tailored financial and non-financial components in line with the young entrepreneurs’ constraints and aspirations.”

He also added that Ibdaa’s partnership with Silatech is “part of a global youth-focused cooperation between Silatech and the Arab Gulf Fund for Development’s (AGFUND) affiliates in the region,” stating that “Ibdaa is a non-banking financial institution, regulated by the Central Bank of Lebanon, with a social mission aiming at creating business opportunities and addressing unemployment issues by providing microfinance services to productive women and youth in various Lebanese regions.

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 the Middle East and North Africa.