To this end Abouzkeh stressed that the agreement hammered out with local banks allows for up to 40 percent loans for projects, provided the SME investors participate with some capital of their own. This capital will vary from 5-10 percent depending on the size of the project.
He nevertheless admitted that there has been a loss of confidence between the banks, the state and the private sector. Abouzkeh also stressed that all Libya Enterprise loan activities will be Sharia-compliant in line with Islamic banking, as prescribed by Libyan law.
The new SME Funds can help SMEs in three ways, Abouzkeh explained; by co-financing, by guaranteeing or by participating with capital. Each project will be judged on its own merits and applicants must go through a process to prove their ability to successfully launch and manage the scheme.
The SME Fund will provide training, consultancy and monitoring of projects, the Libya Enterprise General Manager explained, adding that only projects that are approved could move on to the next stage.
Abouzkeh also revealed that his department is also preparing a 10-year business plan involving all ministries in order to create a database for further decision-making.
He decried the fact that the Libyan government spends LD14 bn on subsidies “yet if LD 1 bn was spent on SMEs it would leverage LD 12 bn from commercial banks. The effects of this LD 1 bn would be transformational on the Libyan economy”, he said.
There is a need for a national investment plan for a diversified and competitive Libyan economy which contrasts between the current economy of consumption of imports to one of a productive and competitive one, the Libya Enterprise General Manager added.
(Source: Libya Herald)
(Entrepreneurship image via Shutterstock)
