ACDI/VOCA Helps Farmers Access Credit in Lebanon
Banks and Small Farms Learn to Work Together
Smallholder farmers and bankers in Lebanon know they need each other: Farmers need money to expand their operations, and banks need promising businesses to invest in.
The government of Lebanon knows they need each other, too. To help link them, the government launched a subsidized loan program called Kafalat that helps small and medium-sized enterprises, including agricultural enterprises, access funding from commercial banks. Yet there is still a gap—farmers are not accessing the financial services they need to grow their enterprises, and banks say they are not able to find bankable agriculture-related businesses.
Through the USAID-funded Lebanon Business Linkages Initiative (LBLI), ACDI/VOCA is helping to bridge this gap.
LBLI Helps Farmers and Bankers Speak the Same Language
"We need them to gain a better understanding of each other. Getting them in the same room helps us to achieve that," says Joseph Hatem, senior business advisor for LBLI.
LBLI staff holds facilitated sessions with farmers and bankers to improve mutual understanding and increase access to loans and other financial services. Before, during and after LBLI workshops, Hatem provides instruction and follow-up phone calls and visits that farmers typically do not encounter, including step-by-step help with the Kafalat loan application process, detailed explanations of collateral needs and coaching on discussions with banks.
LBLI’s facilitated sessions are bearing fruit. Smallholder farmers who were once rejected by banks are now securing loans—averaging $33,000—and expanding their operations thanks to help from the program.
Loan Allows Dairy Farmer to Upgrade, Reach More Markets
Recently, LBLI helped dairy farmer Michel Sarkis Nader secure a loan from Byblos Bank to expand and upgrade his operations. Program staff coached Mr. Nader through the loan process and walked him through the onerous paperwork. Encouraged by LBLI, Nader worked through the process and the bank rewarded his clear plan and expansion goals with a substantial loan.
With the loan and some additional funds, Nader purchased 80 dairy cows, upgraded his milking equipment and farm buildings, and purchased refrigerated storage and feeding units.
With these upgrades and expansions, Nader expects his income next year to be over $67,000, more than double what he earned the previous year. Since securing his loan, he has expanded his operations and is selling to a wider range of clients in the greater Beirut area, including some supermarkets. As his business grows, he hopes to expand to 200 dairy cows and to continue to modernize and upgrade his equipment.
“Without Mr. Joseph’s determined follow-up, I would never have received my loan,” says Nader.
LBLI Strengthens Promising Sectors to Promote Growth
Building understanding between banks and smallholder farmers is just one of the ways LBLI promotes economic growth and poverty reduction.
Working primarily in Lebanon’s agribusiness and tourism industries, the program works directly with the private sector to expand market access, support sector strategies, and strengthen the supporting private sector framework.
ACDI/VOCA implements LBLI in partnership with prime implementer FHI International 360. Read more about LBLI's impact here.
Learn more about ACDI/VOCA’s work in Lebanon.
Pictured at top left: Farmer Michel Sarkis Nader tends to his dairy cows. Recently, Nader was able to secure a loan to expand and upgrade his operations with help from LBLI.
