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Lebanese SME Forum


H.E. Governor Riad Salameh Speech at “Lebanese SME Forum 2017”

Let me thank you for organizing this conference which asserts the importance given by the Government to small and medium enterprises in Lebanon, since these enterprises have a significant role in the Lebanese economy and are the main provider of job opportunities. 
The Lebanese pound is stable and will remain so.
In June 2017, Banque du Liban has consolidated its foreign-currency reserves. This confirms that the Central Bank has the means, as it always declares, to achieve the stability of the national currency.
The Lebanese pound stable exchange rate strengthens confidence in the economy, reinforces the purchasing power, and contributes to the stability of interest rate structure.
All these factors are key to improve the work environment.
Interest rates in Lebanon are stable.
Banque du Liban intervenes to maintain this stability, with a view to preserve Lebanon’s capacity to attract funds and keep pace with interest rates regional and global evolution. 
BDL management has enabled Lebanon to maintain reasonable interest rates ranging between 6 and 7%, compared with 12% in Turkey and 20% in Egypt, two countries with a considerable size and economy.
Interest rates, which are low compared to Lebanon’s rating, confers to productive sectors a competitive advantage that counterbalances in some way the costs of a deteriorating infrastructure, declining public services, and complicated administrative procedures.
Banque du Liban was keen to reinforce banks’ capitalization, in a way to enable these institutions to pursue their lending activities. 
In fact, according to international banking regulations, the lending limit of a bank is closely correlated to its capital. 
Lebanese banks’ capital adequacy ratio will reach 15%, in conformity with Basel 3. These banks will also abide by International Accounting Standards, knowing that they already have the relevant financial means. 
Banque du Liban, the Banking Control Commission, and the Special Investigation Commission will spare no efforts to ensure the strict implementation of the Lebanese laws against money laundering and tax evasion, as well as those promoting good governance and transparency in the financial sector management.
Today, according to international bodies and organizations, Lebanon is fully compliant.
BDL will continue to support economic sectors through banks, as authorized by the Code of Money and Credit.
During the past five years, it has designed stimulus packages that amounted to 5 billion dollars and have benefited to productive sectors (35%) and to the housing sector (65%).
These incentives, together with the exemption of banks from reserve requirements, and the Government loan subsidies, have led to the injection of almost 14 billion dollars to support economic activity in Lebanon.
The painful events in our region and the war in Syria have adversely affected economic growth in Lebanon, which was also negatively impacted by the economic and financial difficulties in the countries where the Lebanese work.
Subsidized loans have helped maintain a positive growth in Lebanon, as a result of their effect on local demand. 
Banque du Liban has issued Circular 331 to launch the digital knowledge economy sector. Owing to BDL guarantee, banks have invested in this sector around USD 400 million.    
These initiatives have led to the creation of hundreds of companies and thousands of job opportunities.
Industrial sectors and real estate development are encountering financing difficulties, which affects SMEs liquidity.
Banque du Liban requests banks to implement the Circular that enables contractors to repay their debts by way of real estate properties.
Industrial companies can also benefit from BDL subsidized loans to finance their working capital, provided the concerned industrial company exports 25% of its production, and provided this percentage increases annually by 3%. 
We have also extended the subsidized loans for a 19-year period, in order to preserve our institutions that are encountering financial difficulties deemed to be temporary and linked to the prevailing circumstances.  
The Capital Markets Authority (CMA) will play a pivotal role in the enhancement of the private sector’s financing capabilities.
Since its inception, the CMA has set regulations to strengthen the sector's reputation. These regulations were successfully implemented by the CMA Control Unit which has also instilled a new culture in the financial market.     
Further, the CMA cooperates with the Ministry of Finance in order to privatize the Beirut Stock Exchange, as legally stipulated, and to launch an electronic trading platform for securities, such as commercial papers and shares of SMEs, particularly those involved in the digital knowledge economy.    
This electronic platform will be accessible from all over the world, and thus will connect the Lebanese diaspora to its homeland and increase the liquidity available in Lebanon.   
The remarkable human capital in Lebanon is an ever-rising wealth unaffected by commodity price fluctuations.  
I have no fear for Lebanon.         
Public Relations & Communications Unit