Lebanese farmers will be qualified for the first time to obtain soft loans thanks to a deal signed on July 8th between Agriculture Minister Hussein Hajj Hassan and the CEO of Fransabank, Mr. Adel Kassar which was held at the Banque du Liban, in the presence of the Central Bank Governor Mr. Riad Salameh and the president of the Association of Banks in Lebanon Dr. Joseph Torbey, Dr. François Bassil, Chairman & General manager of Byblos BANK s.a.l.

The soft loan for farmers will range between LL3 million (close to $2,000) to LL25 million and the debt can be settled up to a period of 36 months. The other important aspect for this new program is that the bank will not ask for any collateral for a loan application from farmers.

Mr. Riad Salameh said before the signing ceremony that the Central Bank would always support any soft loans for this vital sector, adding that the bank will exempt commercial banks from the mandatory reserves if they provided soft loans to productive sectors in Lebanon: “We at the Central Bank are working on measures to encourage lending to productive sectors.

Minister Hassan said the first phase of the new program would focus on small loans and then to be followed by medium loans in the near future. He added that the idea was to provide soft loans to 30 percent and 40 percent of all farmers in the country. According to the minister, farmers only received 4 percent of the entire loans provided by the commercial banks although there were more than 200,000 actual farmers in the country. He added that the ministry will provide guidance to the farmers seeking loans from banks and will direct them to best ways improve the quality of their produce so that they can enter new markets.

“We want to make sure that farmers will make a profit from his business and we will be glad to give them all the advice and guidance,” Hassan said.  He stressed that the new loan program is part of the ministry of agriculture four-year plans to resurrect the agriculture sector in Lebanon.

Dr. Torbey explained that banks in the past did not provide sufficient loans to farmers due to the lack of clear technical mechanism “because one cannot invest in a sector if the continuity is not guaranteed….As far as the new program, the Agriculture Ministry will give the guarantee that these applicants for loans are qualified. The Central Bank will also support this program through subsidizing the interest rates.

Dr. Bassil expressed readiness to provide soft loans to farmers under the new program.