Bank loans are back in Lebanon: Who qualifies?

Report by Lea Fayad, English adaptation by Yasmine Jaroudi 

After a long hiatus, Lebanese banks have reintroduced dollar-denominated loans under stringent conditions.  

For car loans, several banks now offer financing in dollars, requiring a minimum down payment of 30% of the car's value. The remaining amount can be paid in monthly installments over two to five years, depending on the bank. 

The interest rate is approximately 10%. For instance, on a $50,000 car with a 30% down payment, total interest over five years would amount to $9,600. 

However, eligibility is restricted to those earning in fresh dollars with salaries deposited in the same bank or employees of companies that are bank clients.  

For credit cards, banks that have reinstated these services require customers to deposit an equivalent amount as collateral. This means that for a credit card with a $5,000 limit, the user must freeze $5,000 in the bank as a security deposit.  

Personal loans remain highly limited and are only available to account holders with fresh dollar deposits in select banks. The same applies to corporate loans (finance facilities), and import credit lines, which have also been reintroduced for companies maintaining fresh dollar accounts.  

How are loans being financed? 

According to banking sources, the funds for these loans do not come from fresh dollar deposits, which remain protected under Banque du Liban (BDL) regulations. 

Instead, they are sourced from banks' accumulated profits before the 2019 crisis or from transactions such as the sale of Eurobonds or divestment of local and international branches. These liquid assets are estimated to be around $3 billion.  

While the partial return of bank loans provides some support to the economy by financing business activities, banks emphasize that the key obstacle remains the lack of a comprehensive financial recovery plan to restore depositor confidence in Lebanon's banking sector.