Business Listing of Kafalat
Kafalat
Country: Lebanon
Lebanese financial company that helps small and medium sized ventures to access commercial bank funding, by providing loan guarantees based on business plans and feasibility studies.
About Kafalat- What is Kafalat- Serving Borrowers- Serving Lenders (the banks)- Serving the Lebanese Economy- Partnerships- Portfolio of Kafalat- Ownership of Kafalat- AuditorWhat is KafalatKafalat is a Lebanese financial company with a public concern that assists small and medium sized enterprises (SMEs) to access commercial bank funding. Kafalat helps SMEs by providing loan guarantees based on business plans / feasibility studies that show the viability of the proposed business activity. It processes guarantee applications for loans that are to be provided by Lebanese banks to SMEs operating throughout Lebanon.Kafalat targets SMEs and innovative start ups that belong to one of the following economic sectors:? Industry? Agriculture? Tourism? Traditional Crafts? High TechnologyKafalat guaranteed loans benefit from interest rate subsidies. These subsidies have been set up to mitigate the crowding out effect of the high interest rates in Lebanon that are induced by public sector borrowing. The interest rate subsidies are financed by the Lebanese treasury and administered by the Central Bank of Lebanon.topServing BorrowersThe Kafalat loan guarantee is issued based on the viability of the business project to be financed. The guarantee that is made in favor of the lending bank, allows the borrower to provide the bank with collateral, which makes the loan safer for the bank. With the Kafalat loan guarantee, the bank may require less other collateral for the loan. In fact, Kafalat offers two types of guarantees that explicitly require the lending bank not to impose any additional collateral request on the borrower. The final decision (and the conditions) for granting the loan rests however in the hands of the lender. Kafalat constantly urges banks not to ask for other guarantees and to be content with the credit decision made based on the business plan and the feasibility of the project.Subsidy for the interest on the loan: In addition to the guarantee, the borrower benefits from a subsidy on the interest that is being charged by the bank. This allows SMEs to access bank funding at a reasonable cost.topServing Lenders (the banks)? The Kafalat loan guarantee reduces the risk of the loan for the bank.? Kafalat guaranteed loans in Lebanese Pounds benefit from exemption from thestatutary reserve requirement by the Central Bank of Lebanon. This significantlyreduces the cost of capital of the lending bank, allowing it to lend customers withlower interest rates.topServing the Lebanese EconomyThe Lebanese private sector is dominated by small and medium sized enterprises that face difficulties in accessing funds from commercial banks. Kafalat?s loan guarantees help SMEs in Lebanon to access commercial bank debt financing. This allows SMEs to increase the financing of their business activities, which leads to increased domestic investment, output, and employment.topPartnershipsIn 2006, Kafalat has signed a partnership with the European Union and the Ministry of E
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