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Code: ASS – 004 Author: Lorna Grace – International Consultant and Fayza Saad – National Consultant Quantity: 1 Type: copy Status: 1/1
Introduction
In most countries there is an evident strong demand for microfinance services. In fact, most feasibility studies assume a large unmet demand. They use as a basis for this demand, observations by stakeholders, sustained growth rates of programs and small client dropout rates. Good market surveys are usually not available.
In Lebanon, the demand aspect for the microfinance products was unclear. Most stakeholders who were not involved in microfinance were negative, continually questioning the suitability of the initial loan size. Normally, one might write this off as the biased viewpoint of vested interest. However, even microfinance practitioners were only cautiously optimistic about client growth.
But the resistance to microfinance is not just based upon the size of the loan, there was an implied rejection of the higher than market interest rates required. Almost everyone we interviewed, with the exception of the current microfinance suppliers, were convinced that small business or agriculture credit needed subsidized rates.
As a result, there were few organizations that were interested in dedicating part of their services to this market niche. Microfinance is, so far, a difficult sell in Lebanon.
