Lebanon is a country in crisis. Even before COVID-19 and the devastating port explosion of August 2020, Lebanon had been struggling through a severe economic crisis, one exacerbated by the decrease in the local currency’s value, the collapse of the banking system, unemployment, hyper-inflation, and shortages of basic goods. Like so many countries in crisis, capital tends to dry up, leaving only high-cost alternatives. But in Lebanon’s case, the situation is worse as nearly all banks have stopped lending entirely.
Facing fuel, electricity, and drinking water shortages, many Lebanese people have reportedly gone without food in recent months. While some citizens remain optimistic for the recovery of the economy in the next five years, pressing social and economic issues must be addressed in the short term in order for the country’s economy to simply survive.
An important step towards survival? Supporting small businesses with access to hard currency credit facilities. To that end, today Palladium announced a strategic partnership to the launch of the Lebanon Economic Empowerment Fund (LEEF) along with Cedar Oxygen and Palladium’s asset management arm, Bamboo Capital Partners. Together, the three organisations will develop LEEF to assist private sector companies, specifically small and medium-sized enterprises (SMEs) in Lebanon, and ultimately raise USD 500 million into the Fund.
“By focusing on small and medium-sized companies, LEEF will deliver impact on the ground and quickly, bringing economic and social benefits in the communities in which they operate,” notes Jean-Philippe de Schrevel, Founder and Managing Partner of Bamboo Capital Partners.
Born out of this crisis, Cedar Oxygen was launched in 2020 by expatriate Lebanese entrepreneurs and finance professionals to support Lebanon’s economy through the industrial sector. Offering transparent access to hard currency credit facilities for manufacturers, both importers and exporters. The organisation’s goal is now to help attract outside capital to invest in Lebanon and expand its support to the private sector across all regions of the country.
Like in so many other countries around the world, SMEs are the lifeblood of the Lebanese economy, not only in terms of their GDP contribution but in terms of employment opportunities and their importance to local communities. Historically, SMEs have been key to economic growth for countries around the world, and in Lebanon, where they make up about 93 percent of all businesses, providing them with the proper support may well be a catalyst for not only economic growth but for survival.
“We’ve seen time and time again the difference an injection of capital can make for the private sector, imagine what it can do in the face of these unprecedented circumstances,” says Palladium’s Managing Director Jose Maria Ortiz, who adds that the partnership to develop LEEF is a logical next step in the organisation’s ongoing commitment to support Lebanon and its people as they rebuild their economy.
As a first of its kind international fund dedicated to Lebanese businesses, LEEF will provide much-needed credit facilities to help SMEs improve their competitiveness, maximising production and job creation. With a focus on the productive, value-added sectors of the economy, such as premium-product agri-businesses and industrial manufacturers, LEEF’s goal is to eventually apply a greater focus on environmentally sustainable sectors within Lebanon.
“The beauty of this strategic partnership is that it brings all the elements of a successful organic, fit-for-purpose impact response to an economic crisis,” adds Alexandre Harkous, Founder and Managing Partner of Cedar Oxygen. “Cedar Oxygen is providing necessary assistance to the private sector in Lebanon, who are very much in need of a new and trusted partner during the crisis.”
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