Microloans

681 Text/Section/No. 93 Date -6-30/2026

Basic Circular for Banks No. 93 Also directed to financial institutions

We enclose a copy of Basic Decision No. 8779 dated July 13, 2004 concerning Microloans.

Beirut, July 13, 2004 Governor of the Central Bank of Lebanon Riad T. Salamé

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Basic Decision No. 8779 Microloans

The Governor of the Central Bank of Lebanon, pursuant to the Monetary and Loan Law, particularly Article 79 thereof, based on Basic Decision No. 7705 dated October 26, 2000 concerning the Central Department for Banking Risks system, based on Basic Decision No. 7835 dated June 2, 2001 concerning the mandatory reserve system, based on a decision of the Central Council of the Central Bank of Lebanon taken in its meeting held on July 7, 2004, hereby decides as follows:

Article One: For the purposes of this Decision:

1. "Microloan": any loan granted by financial institutions to individuals or small enterprises consisting of four persons or less, to assist them in creating and developing productive (industrial, agricultural, craft), service, tourism, or commercial projects of their own, or in improving their living or housing conditions, provided that its maximum amount is thirty million Lebanese Lira (or its equivalent in foreign currencies) and its repayment period does not exceed six years. Any loan meeting the above conditions and guaranteed, endorsed, or approved by "microfinance institutions" for banks to grant. 1 - Last amended by Article One of Interim Decision No. 12860 dated August 16, 2018 (Interim Circular No. 505).

683 Text/Section/No. 93 Date -6-30/2026 2. "Microfinance institutions": civil associations or non-governmental organizations (NGOs) with which the Central Bank of Lebanon has approved dealing, aiming for these banks to directly and on their own responsibility grant "microloans" meeting the conditions stipulated in paragraph (1) of this Article. The Central Council may, based on reasons within its discretion, consider other entities whose regulations allow them to carry out activities similar to those of civil associations or NGOs as part of "microfinance institutions".

Article Two:

1. Banks may grant "microloans" after taking due care, either: a - from their own funds, with the approval, guarantee, or endorsement of "microfinance institutions". b - from the funds of "microfinance institutions" deposited with them, and with the approval of these latter for the concerned bank to grant the borrower a "microloan".
2. The total approvals, guarantees, and endorsements granted by any "microfinance institution" must not exceed fifteen billion Lebanese Lira (or its equivalent in foreign currencies).

Article Three: To obtain approval for dealing with any civil association or NGO not previously approved by the Central Bank of Lebanon to grant "microloans", banks must submit a request to the Central Bank of Lebanon accompanied by the following documents:

1. The official establishment certificate of the concerned association or organization issued by the competent authorities. 1 - Last amended by Article Two of Interim Decision No. 12860 dated August 16, 2018 (Interim Circular No. 505).

684 2. A certificate issued by the competent authorities listing the members of the administrative board of the association or organization, specifying the authorized signatories. 3. A certified copy of the statutes or internal regulations, as applicable, of the association or organization. 4. A study prepared by the association or organization showing the volume of loans previously granted, amount brackets, and their distribution across economic sectors and regions. 5. Any other documents the Central Bank of Lebanon deems necessary.

Article Four:

Article Five: Prior to granting the loans referred to in Article Seven of this Decision, the written approval of the beneficiary must be obtained to grant banks and financial institutions the right to access their risk data.

2. Article Six: Banks and financial institutions, each concerning itself, must include in the data they send on magnetic disks to the Central Department for Banking Risks, at the beginning of each month, information regarding:

• "Microloans" granted by banks with the approval, guarantee, or endorsement of "microfinance institutions".
• "Microloans" funded by banks and granted by financial institutions.
• "Microloans" granted by financial institutions and funded by them.

1 - This Article was repealed by Article Three of Interim Decision No. 12860 dated August 16, 2018 (Interim Circular No. 505). 2 - This Article was amended by Article Four of Interim Decision No. 12860 dated August 16, 2018 (Interim Circular No. 505).

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1. Article Seven:
2. Microfinance institutions are granted a maximum period of six months to submit an application for establishing a financial institution in accordance with the provisions of Basic Decision No. 13819 dated May 21, 2026, concerning the conditions for establishing and operating financial institutions, and to provide the Central Bank of Lebanon with the documents specified in said Decision, particularly the business plan referred to in Article Ten thereof.
3. The Central Bank of Lebanon shall study the establishment application and take an appropriate decision regarding approval or non-approval. In case of approval, the concerned institution is granted a six-month period to fully comply with the provisions of said Basic Decision. The Central Council may, in exceptional cases and upon a reasoned request from the concerned institution, grant this latter an additional period to comply with the provisions of said Basic Decision.
4. Upon the expiration of the periods specified in paragraphs "1" and "2" above, any "microfinance institution" not listed on the register of financial institutions shall no longer have the right to conduct any lending operations, subject to the application of Article 200 of the Monetary and Loan Law and Article 770 of the Penal Code, and the Central Bank of Lebanon shall pursue any non-compliant institution or company before the competent judicial authority.

Article Eight: This Decision shall take effect upon its issuance.

Article Nine: This Decision shall be published in the Official Gazette. Beirut, July 13, 2004 Governor of the Central Bank of Lebanon Riad T. Salamé

1 - Last amended by Interim Decision No. 13820 dated May 21, 2026 (Interim Circular No. 765).