Resilience amid crisis: A sector assessment of microfinance in Lebanon

Lebanon’s microfinance sector has faced unprecedented strain following years of compounded crises, including economic collapse, hyperinflation, the COVID-19 pandemic and recent conflict. This report, developed under the ILO’s PROSPECTS programme, provides a comprehensive assessment of the sector’s performance, institutional resilience and evolving role in supporting vulnerable populations, micro-entrepreneurs and small businesses. Despite a sharp contraction in portfolios and outreach, microfinance institutions have demonstrated adaptability by adjusting lending practices, strengthening risk management and continuing to serve underserved communities.

The publication identifies critical constraints, particularly severe liquidity shortages and limited access to funding, while highlighting strong and persistent demand for microfinance services. It outlines practical recommendations to restore sector stability, including improved coordination, the mobilization of blended finance and guarantees, and enhanced institutional capacity. The report underscores the importance of microfinance as a key driver of inclusive recovery, job creation and economic resilience in Lebanon, especially in the absence of a fully functioning banking sector.