Al Majmoua carves a niche

DUBAI - The Lebanese Association for Development, also known as Al Majmoua, has to date helped over 5,500 needy people obtain micro-credit loans in post-war Lebanon, with over $35 million channelled through the organisation to those in real need. With six branches around Lebanon, Al Majmoua has carved out a niche for itself, offering loans to people that main stream bankers would not touch with a "ten foot pole".

By Hani M Bathish

Published: Fri 26 Sep 2003, 9:50 PM

Last updated: Wed 1 Apr 2015, 11:50 PM

Youssef Fawaz, Operations Director of Al Majmoua, said in an interview with Khaleej Times on the sidelines of Dubai 2003, that his organisation's presence at the annual meetings in Dubai is to primarily show solidarity with other civil society organisations from around the globe who are here to put their views across to the WB and IMF.

The organisation is an offshoot of the 'US Save the Children' programme, established in 1932 to assist children of coalminers in Appalachia. US Save the Children is part of the Save the Children International Alliance, a non-profit, non-political, non-sectarian organisation working in more than 35 nations around the globe to assist children in need.

"Al Majmoua aims to encourage group solidarity, we started off giving loans to groups of women. These micro-loans were initially no bigger than $ 200 per woman to be paid within four to six months. The reason we lent to groups and not individuals, is so that if one woman in the group defaults on her repayments, the other members of the group pay her share," Mr Fawaz said.

Although initially the programme was for women only, Al Majmoua found that many women were taking the money and giving it to their husbands. So now they have expanded their micro-lending scheme to men as well. The organisation is also extending its scheme to individuals and not only to groups, so that one need no longer be a part of a group to qualify for a loan. "We have had many people, grocers, butchers, small farmers, knocking on our door asking for a loan, these are small businesses that banks would not touch with a ten foot pole. So we extended our lending scheme to these small enterprises as well.

"Each time a customer successfully repays their initial loan, we increase the amount of the next loan by $100, up to a maximum limit of $1,300. But what worries me is that development work is becoming a fad. A few years ago micro-loans were the fad and we would get money and donations at every turn, now funding for micro-lending is drying up because it is no longer the fashion," Mr Fawaz said.

He added that his organisation aims to become self sufficient and not continue to rely on grants and donations. As a result, Al Majmoua charges interest of its clients in order to cover its operating costs, although their conditions for approving a loan are far more lenient than many banks in Lebanon. "Although Lebanon is an over-banked country, with more than 80 local banks, it is very difficult to get a loan. First you need to own a piece of land or property and have a steady job for starters," Mr Fawaz said. He stressed that this sincere desire is for the World Bank and International Monetary Fund to do what they preach as far as helping develop good governance in many developing countries, adding that at times the WB and IMF sign agreements and deal with corrupt officials in some countries as a matter of expedience. And as a result of this, the money rarely reaches the people who really need it.