Al-Majmoua was initially launched as a micro-finance program within a larger parent organization, Save the Children. Later on January 1, 1998, it started operating as an independent stand-alone entity, concerned with micro-finance business. As a non-profit non-sectarian organization, Al-Majmoua reaches out to those segments marginalized from the existing financial system with limited or zero access to formal lending channels. Typically, banks choose not to engage in the micro-finance market and find it difficult to cater to low-income clients who require small amounts of capital and lack the collateral and credit histories required to satisfy the requirements of traditional banking. Al-Majmoua emerged to fill a much needed niche in the market and involve the disadvantaged in the economic cycle. To this end, it offers financial support to impoverished borrowers to help them start-up or develop small projects and initiatives. It also extends business development services such as financial education training, vocational training, marketing support, networking, exchange of experiences and capacity building training.

 

AL-Majmoua reaches out to the un-served and under-served segments of the society regardless of their religion, nationality, gender or political affiliation. It only requires that the borrowers be officially resident in Lebanon and have been running a business for at least one year. It then proceeds to check the applicant’s repayment history and verify the validity of the information provided and if they prove to be true, it awards the loan.  Currently, Al-Majmoua has a client base of roughly 48,000 borrowers and a network of 28 offices and 280 staff members across Lebanon. It is also active inside Palestinian camps. 

 

During its more than 16 years in the micro-finance industry, Al-Majmoua has built a loan portfolio worth USD 300 million. The length of the loan stretches up to 36 months and interest rates vacillate between 12% and 15% in order to shoulder operational costs and ensure the sustainability of services. 

 

This loan targets both men and women, and specifically people who are employed and who are either not registered in the NSSF or whose salary is lower than the required minimum to obtain a bank loan  (USD 300-3000). 

Group loan
This loan targets women entrepreneurs in rural areas. No collateral for the group loan is required; the solidarity of the group is considered a guarantee (USD 200-2000). 

Seasonal loan
This loan targets the businesses that are heavily dependent on seasonality, such as the agriculture and travel sectors. To adapt the seasonality of the businesses, it was designed with a flexible re-payment scheme that is adjustable according to the season. 

Micro-entrepreneur loan
Offered to both men and women, this loan targets existing micro-businesses and in few cases, start-ups. In underprivileged areas in South Lebanon, these loans are disbursed in Lebanese pounds as well. (USD 300-5000)

Housing improvement loan 
This product is offered in partnership with Habitat for Humanity. Al-Majmoua manages the client selection, the loan disbursement and follow-up, while Habitat provides an engineer who advises clients on the particulars of their home improvement needs. The loan is directed to low-income individuals who wish to furnish or improve their homes. (USD 500-5000)

SME loan
This loan targets existing micro businesses, specifically borrowers who have taken several loans for a minimum of two loan periods. (USD 500-5000)

ICT loan
This loan targets entrepreneurs working in the ICT industry in rural areas. It is offered to existing businesses as well as start-ups. ICT loans are funded by Cisco and range between USD 5000 and USD 10,000.

In addition to its lending services, the Al-Majmoua runs training programs tailored to assist people in attaining the skills they need to develop their businesses or start-up new ones. The organization has recently launched a program designed to train new skills for the handicapped on new skills and help their parents facilitate their lives. 

Challenges
Al-Majmoua officers reported that the primary challenge besetting them was the failure of some borrowers to meet their loan obligations. This was the case after the July War in 2006 when people suffered displacement and decline in businesses, thus affecting their ability to repay their debts. The arrival of Syrian refugees has both overstretched the ability of host families to accommodate them and injected new competition into the Lebanese labor market, resulting in clear declines in the income and productivity of borrowers and increasing default rates. Not only is the default on loans attributed to these two factors, it is also because of the lack of coordination within the micro-credit sector, as borrowers tend to seek assistance from numerous financial institutions at the same time, which undermines their repayment capability and exposes micro-finance institutions to loss.