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Lebanon: lending & credit regulation

Regulated

Lebanon lending regime: BDL monopoly, frozen new licenses, strict FX controls

Lead regulator:
Banque du Liban (Central Bank of Lebanon)
Key law:
Code of Money and Credit (Basic Decisions No. 7776, 6116, 12174, 13819)
Last updated:
2026-07-12

The lending and consumer credit sector is strictly regulated by the Banque du Liban (BDL) under the Code of Money and Credit. All credit granting activities require specific authorization, with the BDL currently suspending new permits for independent lending accounts while mandating their conversion into licensed financial institutions.

The regulatory framework imposes rigorous capital adequacy, risk classification, and provisioning standards (IFRS 9). Recent directives have tightened controls on US dollar lending, requiring strict funding sources and limiting garnishments, while establishing comprehensive licensing for Finance Companies across lending, fiduciary, and microfinance categories.

The sector operates under a dual currency regime with significant restrictions on foreign currency deposits and loans. The BDL actively manages credit through subsidized facilities for priority sectors (housing, education, industry) and enforces strict concentration limits and credit reporting obligations via the Central Office for Credit Risk.

Who regulates

  • Banque du Liban (BDL)

    Primary supervisor for all banking, financial institutions, and lending operations; issues Basic Decisions and Circulars governing credit, capital, and licensing.

    [1][2][3][4]

Core laws & rules

  • Code of Money and Credit (1963 (as amended by BDL Basic Decisions))

    The foundational legal framework governing monetary and credit operations. Specific activities are regulated through BDL Basic Decisions, notably No. 7776 (Credit/Investment), No. 6116 (Facilities), No. 12174 (Lending Accounts), and No. 13819 (Finance Companies).

    [1][2][3][5]

  • Basic Decision No. 13819 (2026)

    Establishes comprehensive licensing and operational conditions for Finance Companies, categorizing services into Lending, Fiduciary, and Microfinance, and mandating strict capital thresholds.

    [2]

  • Basic Decision No. 12174 (as amended by Circular 13821) (2026)

    Governs 'Lending Accounts' (Constatours). The 2026 amendment suspends new permits and requires existing entities to convert to licensed financial institutions within one year.

    [1]

Licensing & registration

  • Finance Companies

    New licensing regime for entities providing Lending, Fiduciary, or Microfinance services. Requires strict capital thresholds and comprehensive operational conditions. Capital: Strict capital threshold mandated (specific amount not stated in summary) Timeline: Established May 21, 2026

    [2]

  • Lending Accounts (Constatours)

    New permits suspended. Existing holders have a one-year deadline to convert into licensed financial institutions. Capital: Previously mandated minimum two billion Lebanese Lira (2016) Timeline: Suspension effective May 21, 2026

    [1][6]

  • Microfinance

    Banks and specialized institutions can grant microloans up to 30 million LBP. Microfinance institutions require specific authorization. Capital: Exemptions from certain capital requirements for microfinance-focused institutions (2018) Timeline: Ongoing, amended 2018/2026

    [7][8]

Restrictions & warnings

  • US dollar-denominated loans are prohibited unless funded by 'Cash Funds' as defined by the BDL. Banks must conduct adequate credit studies for cash fund guarantees.

    [4][3]

  • Salary garnishments are limited per Article 863 of the Civil Procedure Law. US dollar installment loans must be restructured to comply with these limits.

  • Net lending to the private sector in Lebanese Lira is capped at 25% of customer deposits, with excess amounts requiring specific regulatory treatment.

    [9]

  • Banks must maintain a minimum 40% ratio of net liquid shareholders' equity in Lebanese pounds as cash and adhere to strict IFRS 9 provisioning rules.

    [10][11]

Direction of travel

  • The regulatory direction is towards consolidation and formalization of the lending sector, with a clear mandate to phase out unlicensed 'Lending Accounts' and integrate them into the supervised banking/finance company framework.

    [1]

  • Continued emphasis on capital preservation and risk management through strict IFRS 9 application, credit risk reporting, and limits on foreign currency exposure.

    [11][12]

Sources

  1. Conditions for Conducting Lending Operations as per the Provisions of Articles 183 and 184 of the Code of Money and Credit · 2026-05-21
  2. Conditions for the Establishment and Functioning of Finance Companies · 2026-05-21
  3. Operations Relating to Credit, Investment, Shareholding and Participation · 2026-05-04
  4. Operations relating to credit, investment and shareholding and participation · 2025-01-13
  5. Operations relating to credit, investment, shareholding and participation · 2001-02-21
  6. Conditions for Conducting Lending Operations as per the Provisions of Articles 183 and 184 of the Code of Money and Credit · 2016-01-21
  7. Central Bank of Lebanon Circular No. 505: Amendment of Basic Decision No. 8779 on Microcredits · 2018-08-16
  8. Conditions for the Establishment and Operation of Financial Institutions · 2018-08-16
  9. Central Bank Decision No. 12857 Amending Decision No. 7776 on Credit, Investment, and Participation Operations · 2018-08-10
  10. Constitution of Provisions and Ratio of Net Liquid Shareholders Equity in Lebanese Pound · 2000-10-18
  11. International Financial Reporting Standard No. 9 (IFRS 9) · 2024-06-06
  12. The Status of the Central Office for Credit Risk · 2026-03-16

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This guide is compiled automatically from 12 primary-source documents published by Lebanon's regulators, reviewed by RegAlert, and refreshed monthly (last updated 2026-07-12). It is not legal advice — always confirm requirements with the regulator or local counsel before acting.