• | 9:00 am

Lebanon is cash-strapped. Can microloans save small women-owned businesses?

Micro-credit institutions are making it possible for women to raise funds to grow business, or stay afloat in hard times.

Lebanon is cash-strapped. Can microloans save small women-owned businesses?
[Source photo: Anvita Gupta/Fast Company Middle East]

Najla Ghnatios moved around her clean white kitchen with ease as she prepared the dough for the savory food order she would have to deliver that day. She is assisted by three women she employs part-time, depending on their availability and the workload.

“Seven years ago, I started cooking at home, offering daily lunch meals and catering for small events. As the business grew, I shifted from home and rented a shop to produce on a bigger scale,” says the 46-year-old Ghnatios.

Living in a rural area in the Byblos district north of Beirut, Ghnatios could achieve her dream of becoming self-employed and a successful entrepreneur thanks to the micro-loans she got from Vitas. It is one of Lebanon’s leading micro-financing institutions empowering disadvantaged women.

“My income helped raise the children and improve our living conditions. The children were so proud of me because I was productive. My husband’s work was affected by the pandemic, but my business kept us going,” Ghnatios said.

The successive loans she got from Vitas helped her equip her kitchen with a fridge, big oven, and utensils needed to produce larger quantities of her brand food (Mumitas’ Cuisine), which now includes a large variety of savory meals and sweets.


The economic crisis that hit Lebanon in 2019 has largely impacted micro-credit institutions’ ability to sustain their activities. In the past three years, the Lebanese pound has lost more than 95% of its value, and the purchasing power of people has plummeted sharply as banks have placed painful restrictions on depositors’ withdrawals.

“We support small businesses to help the disadvantaged class to secure a better living,” says Roudayna Rahbani, project manager of Vitas in the Byblos region. “Despite the tough situation, we continue in our activities, though the volume of our work has decreased significantly after the crisis.”

The crisis, which restricted access to bank deposits for individuals and businesses alike, had detrimental consequences on financial institutions and their clients, who had to close their businesses or could no longer repay the loans, even small ones.

Youssef Fawwaz, executive director of Al Majmoua, a leading non-profit micro-credit institution in Lebanon, described the impact of the crisis as “disastrous.”

“On the eve of the crisis, we had $100 million in our bank portfolio, but overnight there were no dollars in the market, and our clients had difficulties paying back with green notes. The loss we incurred is beyond calculation,” says Fawwaz.

Before the crisis, Al Majmoua had 93,000 active clients across Lebanon, 58% women, employed 500 staff, and operated 30 branches, but it had to downsize to survive. Today the number of clients dropped to 33,000, staff reduced by half and some 15 branches were closed down.

After the crisis, Al Majmoua started disbursing loans in Lebanese pounds.

“The biggest micro-credit we are giving today is $250, which is peanuts compared to the pre-crisis loan average of $1500,” adds Fawwaz.

Clients of micro-credit institutions were severely affected by the financial crisis, the worst ever in Lebanon. According to a 2020 survey of micro-financing institutions, an estimated 40% of the clients had fallen into extreme poverty.

“They went from being working poor who could pay back the loan and still be able to live reasonably to people who are destitute and in need of food to survive. Many had to sell working assets to be able to survive. How can you ask someone like this to pay back?” asks Fawwaz.

“There is a big chunk of clients who could not pay, others who could pay but in Lebanese pounds pegged at 1500 to the dollar. It meant that our portfolio suffered a steep descent from $100 million to practically nothing in no time,” he adds.


Despite being completely battered, Al Majmoua continues to do business. There has been a depression in demand as many people refrained from taking loans while others were no longer eligible, and some still wanted to take some loans because their businesses continued to operate at a slower speed.

“We want to continue standing by our clients when they need us most. We remain relevant despite more than three years into the crisis with no end in sight,” says Fawwaz. He is adamant that Al Majmoua, established in 1998 after being a small project under Save the Children, will survive, though with great difficulty.

“Sooner or later, there would be an economic recovery plan and eventually a need for financial services. Who else is in a better position than micro-finance institutions to deliver to those who cannot access the banking sector? We must help preserve the micro-credit sector as it plays a hugely important economic recovery role.”

Liliane Hakim and Jamila Abi Mershed are among Al Majmoua’s beneficiaries who could establish their businesses and become financially viable. The loans helped Abi Mershed complete her higher education and start sweets production (LovinSweet), and the latter invested in handmade women’s accessories (ByJamilla).

Hakim has been passionate about baking, and after her graduation, she took the first loan of $2000 to start her business from home four years ago. “It is a negligible sum, but it helped me buy quality ingredients, molds, and decorative material for the cakes,” says the 28-year-old, who lives in a remote village in Mount Lebanon.

Her business has since expanded despite the economic crisis. She has set up an Instagram page to market her products, expanded her menu, and hopes to establish her shop in the future.  

“I always aspired to be my boss. When I look back and see how much I have achieved with the help of micro finances, it gives me great satisfaction and self-confidence and makes me want to achieve more,” Hakim adds.

On her part, 56-year-old Abi Mershed sought Al Majmoua’s loans to expand her women’s accessories and to participate in handicraft exhibitions. “I was able to produce a bigger collection of earrings and necklaces and diversify my accessories. It makes a big difference when you have bigger means and resources; otherwise, you are limited, and the progress is very slow,” she says.

“My work has helped improve our livelihood a lot. My husband has chronic diseases, and our livelihood depends heavily on my work,” she adds.

  Be in the Know. Subscribe to our Newsletters.


Samar el Kadi is a freelance Lebanese journalist. Worked with the Middle East Reporter and United Press International (UPI) as a reporter and writer covering the last years of the (1975-1990) Lebanese civil war and post-war Lebanon. Also covered the US invasion of Iraq remotely for UPI. For two years, was the day editor of the Lebanon desk of the Daily Star, the local English-language newspaper and later the editor of the society and culture sections of the London-based The Arab Weekly newspaper. Holder of a bachelor's degree in political sciences and public administration from the American University of Beirut. More