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SILATECH, VITAS LEBANON LAUNCH YOUTH BUSINESS LOANS

Sep 07, 2015

Lebanese microfinance company Vitas Lebanon has launched a new youth enterprise focused initiative in partnership with regional social initiative Silatech. Designed to help finance youth-run businesses, the initiative includes the introduction of a new dedicated youth start-up loan product called “Taasis” as well as an outreach effort to finance more existing youth enterprises. This initiative is expected to create or sustain 2,400 youth jobs over a three-year period.

The Taasis (“Founding” or “Establishment”) loan provides young entrepreneurs with loans averaging USD 5000 for financing for their startup businesses. In addition Vitas Lebanon will seek to provide existing youth enterprises with loans averaging USD 2000 to finance their expansion.

In parallel with providing financing, Vitas with the support of Silatech, will also provide business skills training to the youth and launch a business plan competition to raise awareness of entrepreneurship and generate successful business ideas which they can then finance.

In June 2015, Silatech conducted a two-day “training of trainers” workshop in Beirut for Vitas Lebanon credit officers outlining approaches and communication techniques for effectively targeting youth clients, and advising on more accurate and relevant criteria to use when screening loan applicants.

At 30 percent, unemployment among young Arab men and women is the highest in the world. Youth unemployment in Lebanon is somewhat lower, at 21 percent, though still markedly higher than the global average of 13 percent.

Silatech’s support to Vitas Lebanon is part of a broader programme across the region, which includes the design and launch of youth friendly financial products with microfinance institutions (MFIs) in multiple countries. 2015 will see new youth focused products and initiatives launched by MFIs in Lebanon, Jordan, Iraq, Egypt, Tunisia, Sudan and Morocco.

Two examples of these are MicroCred Tunisia who recently launched “Irada,” while Jordan’s Tamweelcom announced “Amal Al Shabab,” both in partnership with Silatech and designed especially for young startup entrepreneurs. These products are designed to help youth create jobs not only for themselves, but also for other youth as their businesses succeed and grow.

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. Silatech works to expand access to finance for young Arab entrepreneurs, working with banks and financial institutions throughout the region to develop youth-friendly loan products and business support services.

Innovative financial institutions such as Vitas stand to gain from targeting the youth enterprise market, as younger clients can offer substantial lifetime value, and institutions can gain significant positive visibility by implementing meaningful solutions in the fight against youth unemployment.

Mohammed Al Naimi, Acting CEO of Silatech, said “In the fight against youth unemployment in the region, youth enterprise is becoming one key solution. Working with established and experienced partners such as Vitas Lebanon is essential in order to understand the needs of young people and design interventions that enable them to start and grow businesses which create jobs for themselves and others.

Ziad Halaby, General Manager of Vitas Lebanon, said: “This cooperation between Vitas and Silatech comes at a critical time, as Lebanon’s unemployment rate has been increasing drastically over the past couple of years. Introducing a specialised youth enterprise loan product aims to create job opportunities for the younger generation and to support existing local microentrepreneurs. This initiative is expected to help create or sustain over 2400 youth jobs throughout Lebanon.”

Vitas Lebanon is one of the country’s leading microfinance institutions which  has an innovative business model: it partners with several local banks to expand outreach to clients beyond its own branch network, and further accommodates clients’ needs by offering loans in both the local currency and US dollars.

Silatech is a regional social initiative that works with partners throughout the Arab world to provide employment and entrepreneurship opportunities for young people. Silatech is currently working with 30 microfinance institutions in 11 countries throughout the region, and has to date enabled more than 90,000 youth-run businesses to start and grow, supporting more than 140,000 youth jobs. Silatech is the Arab region’s largest provider of youth financial services.

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IBDAA, SILATECH LAUNCH LOAN PRODUCTS FOR LEBANESE ENTREPRENEURS

Sep 02, 2015

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.

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