Central Bank of Lebanon guarantees $400 million to boost entrepreneurial ecosystem
This story is provided by MIT Enterprise Forum- Pan Arab Region
Ensuring that a business will work in the Arab region is tough, especially during times of political instability and tension. Yet, to some Lebanese entrepreneurs today, the prospects are more positive than they have ever been.
The Central Bank of Lebanon has guaranteed $400 million for Lebanese banks equity investment in startups, incubators, accelerators and funds, according to the circular. This renders “Lebanon’s sovereign financial risk profile to roughly the same level as San Francisco, New York and London”, tweets Nicolas Sehnaoui, Lebanese Minister of Telecommunications.
During the Oasis 500 bootcamp training for entrepreneurs organized and hosted by Coworking+961, and in partnership with MIT Enterprise Forum Pan Arab, Minister Sehnaoui announced that this guarantee by the Central Bank of Lebanon would produce a promising digital economy in Lebanon.
"This innovative measure will be transformational for the Lebanese start-up scene, and an eye-opener for traditional banks to benefit from new investment opportunities," said Hala Fadel, Chair of the MIT Enterprise Forum Pan Arab
Most incubators, startups and accelerators welcomed the news with elation.
“More VCs and seed funds will be created and attracted into Lebanon,” said Nicolas Rouhana, Executive Director of Berytech, “There will be a growing national entrepreneurial ecosystem endorsed by major public sector umbrella entities.” Rouhana believes that this will attract tech diaspora and reverse migration.
Entrepreneurs with startups may feel encouraged to grow their business and remain in Lebanon. Natasawak, a Lebanese online shopping platform startup, reacted to the news with, “this will influence entrepreneurs like us to stay in Lebanon.”
“Every business has to be protected. This initiative somehow assures sustainability in the country,” said Imad Karam, CEO of Natasawak. Karam and his managing partner stressed that they now feel encouraged to go in the right direction.
Entrepreneurs are not the only ones who feel more secure.
“The fund will build bridges with similar structures to those in Silicon Valley,” said Rouhana.
“If properly managed, this could be the boost needed to take current efforts in the ecosystem one level up,” said Fadi Bizri, Managing Director of Bader Young Entrepreneurs Program.
Andre Chelhot, Head of Interest Rates and FX at the Olayan Group finds that the impact of the fund should raise the level of productivity of the country. He sees it as a potential growth rate, which will invest in the Lebanon's productivity, allowing it to grow faster without creating inflation.
Chelhot feels that this move is positive, as long as the fund is well managed by specialists who can conduct correct studies of startup projects, and have a vast amount of experience in the entrepreneurial field.
The announcement of the fund has created enthusiasm within the entrepreneurial ecosystem.
“This will help in closing our second fund to invest in tech, media, and creative industries,” said Rouhana about incubator Berytech.
“We are looking at the details seriously since Bader is very well positioned to take advantage of this opportunity in more ways than one,” said Bizri referring to startup-supporter Bader.
“We are encouraged to take more risks in very early stage ventures,” added Rouhana, with the additional programs and technical assistance resources that may now be available to support startups.