Refugees now account for 23% of the total population in Lebanon. The impact of this on Lebanese society is considerable: growing unemployment and poverty combined with enormous pressure on public services and infrastructure.
Samira is one of the refugees who fled to Lebanon and built a new life there. When she first came to Lebanon with her two children, she could only think about the war she had left behind. "The last news I heard was that my house had been destroyed," she said. She realised then that she could not go back home, and so she decided to build her life in Lebanon.
But how? There were no savings left. She had lost everything because of the war. Her Lebanese neighbour Souad offered to help her. Samira wanted to start a business renting out wedding dresses. Souad suggested that they take out a loan together so that they could support each other with the repayment. They received a loan from microfinance institution Al Majmoua. As a result, Samira was able to build up a successful wedding dress business, and her income has doubled.
Al Majmoua in Lebanon
Al Majmoua provides loans to over 80,000 small-scale entrepreneurs. The microfinance institution is committed to contributing to a financial sector accessible to all social groups, especially those on low incomes. Al Majmoua has worked closely with the International Rescue Committee (IRC) and the UN Refugee Organisation to develop loans for refugees. Al Majmoua now provides loans to more than 8,500 Syrian refugees; over 80% of these refugees are women.
Overcoming the risk
Al Majmoua is doing pioneering work to develop loans for refugees. Alia Farhat from Al Majmoua: "Many institutions are still reluctant to provide financing for refugees. They see lots of obstacles. Will refugees pay back their loans, will they return to their homeland, and do they have the right identity documents? Supporting this group is a key part of the impact we want to make."
Al Majmoua started with training and financial education. Later it provided group loans to groups of Syrian and Lebanese women who acted as a guarantee for each other. These groups were deliberately mixed to stimulate mutual trust. "Many Lebanese people see Syrian refugees as a risk and by doing this we can break down some of these notions."
60 million refugees
Alia sees changes to legislation and regulations as one of the most important steps that must be taken to increase the availability of loans for refugees. There are still many legal barriers. Just consider trying to open a bank account without the correct paperwork or a fixed address. According to Alia: "If the rules keep saying 'it's not possible', then that can bring certain risks. Refugees will look for other ways to make money. Prostitution is one example of this. Or child labour."
The role of microfinance for refugees is increasingly recognised. "It's good to see that more and more microfinance institutions are becoming interested in this group. This is also because there is more information about things like the repayment percentage of these loans. It is almost 100%," says Fadoua Boudiba, Senior Investment Officer. She is involved in managing and building the inclusive finance investment portfolio in the Middle East and North Africa, including Al Majmoua.
"Thanks to microfinance, people can participate again. And that is what microfinance is all about; supporting people who are excluded from financial services. Because we have to be realistic—the refugee problem will not disappear. More than 60 million people worldwide have fled their country. Many will not return and want to build a new life for themselves. Let's give them that chance."
Triodos Microfinance Fund and Triodos Fair Share Fund have provided a loan to Al Majmoua to increase its outreach. Find out more about our investments in inclusive finance.