Lenders call for more incentives

70 percent of loans for housing already used up

Banks have asked the Central Bank (BDL) to give them more financial facilities to stimulate lending to the local private sector in order to spur economic growth.

The BDL had allocated $1.4 billion to banks in January in the form of soft loans at a fixed interest rate of one percent per year.

This lending stimulus is intended to replace the previous BDL-run subsidy scheme, by which banks were granted discounts on their mandatory reserves for some of the loans they offer (mainly for housing and green energy). Many banks have exceeded the maximum usage of their BDL reserves (set at 90 percent).

Riad Salameh, Governor of the BDL, said he would consider extending further financial facilities to lenders. According to Salameh, there is significant demand for loans related to renewable energy projects, thus the BDL will give priority to these loans.

In the previous facilities package, around $820 million were allocated for housing loans, while $300 million were earmarked for funding green energy production and environment-friendly initiatives.

Salameh had said earlier that almost 70 percent of the loans reserved for housing have already been expended.