|EU funds for small businesses transferred
|The European Commission in Lebanon announced a 4 million euro ($4.7 million) transfer of funds to a loan program designed to aid small and medium sized businesses in Lebanon. The head of the European Commission, Ambassador Patrick Renauld, joined Economy and Trade Minister Sami Haddad and Khater Abi Habib, the chairman of Kafalat, the government program that will distribute the funds, to announce the signing of the transfer.
The transfer is part of a 17.8 million euro fund set to expire at the end of 2007. Habib said he hopes to raise credit provided by the fund to small businesses to LL 600 million from LL 300 million.
Renauld quoted a Lebanese economic expert as saying: "Small and medium size enterprises (SME) are not only part of the economy, they form the entire Lebanese economy."
Renauld added: "I have always supported this view that could be substantiated through three basic figures, that small and medium establishments, hiring up to 20 employees make up 98 percent of the total Lebanese companies, 75 percent of permanent jobs and 60 percent of the added value."
In his speech, Economy and Trade Minister, Sami Haddad, said: "The program, jointly funded by the government and the EU, with a budget of 17.8 millions euros, has been operational for six months and is expected to end in December 2007."
Since it became operational, the team has coordinated SME integrated support. Its activities have included policy formulation, training of start-ups and existing firms and, most importantly, enhancing access to finance.
The SME support program will work through three primary axis, including: improving the policy and regulatory framework which facilitates the creation and growth of business; creating four business development centers across Lebanon; and enhancing access to finance through a partnership with Kafalat and through new schemes encouraging equity and risk finance."
Abi Habib talked about the difficulties facing SME's and Kafalat's previous experience.
He said goals include encouraging banks not to demand additional guarantees and collateral and accept the guarantee provided by Kafalat and creating funds for start-ups to enable younger and inexperienced entrepreneurs."
"The EU will create a co-fund through the Economy Ministry to be managed by Kafalat to issue backup guarantees to overcome the aforementioned weak points," he said.
Renauld reminded the audience he worked on the program with late Economy Minister Bassel Fleihan, who he praised for his dedication to his work.
"Fleihan never took his work lightly but was so creative, refusing to compromise at the expense of his strong beliefs," Renauld said. "He insisted that the program benefited creative and genuine small and medium entrepreneurs."
A delegation from the European Commission arrived in Beirut Tuesday to hold discussions with the government and private sector, "in order to prepare for the launching of negotiations in the field of services and investments," according to a press release.
"The delegation will discuss with the Lebanese authorities the possibility of strengthening the institutional framework of the association agreement, through a modern and efficient system of dispute settlement in the commercial field," it added.
Adnan El Ghoul
The Daily Star