Abstract:

This paper studies the specifics and developments of Lebanon’s banking sector with special emphasis on the bank loans for the SMEs. The methodology is mainly based on descriptive analysis. The analysis covers the years after the foundation of Lebanese Central Bank and focus on implications on SMEs access to finance. There were found proofs for close relations between enterprises and banks. Far more Lebanese enterprises rely on banks to finance investments and working capital. These relations are the main reason banks to be considered as largely integrated in the Lebanese economy. Collateral-based lending is very well developed in Lebanon. In the same perspective, circulars and loan packages are clarifying this strict relationship. Basel agreements also affect the crediting process. Thus, nearly half of the firms in Lebanon identify the access to finance as a major constraint. There was also found evidence for oligopoly type of the credit market in the country. Together, intensifying competition with digitalization makes banks optimize their branch networks and bank machine coverage. All these points witness in favor of the assumption of a very well developed and modern banking crediting system in Lebanon. The general conclusion is in favor of the implication for very well developed, modern and efficient financial sector of Lebanon which creates favorable conditions for sustainable growth and development of SMEs’ credits in the Lebanese economy.

Keywords:

Central banks; banks; SMEs; credits, financing policy.

JEL Classification:

E58, G21, G32, H81.

How to Cite:

Majida Jrad. Lebanese Banking Sector Model and Its Implications on Small and Medium Enterprises. [ref]: vol.22.2024. available at: https://refpress.org/ref-vol22-a27/