The Business Year

Dr. Makram Sader

LEBANON - Finance


Secretary General, Association of Banks in Lebanon


Dr. Makram Sader has been the Secretary General of the Association of Banks in Lebanon (ABL) since 1991, where he is actively involved in the reorganization of the banking industry, with an emphasis on regulations, along with highly recognized standards. He also acts as Chairman of Lebanon’s Banking Commission (ICC), a Board Member of the Caisse Nationale de la Sécurité Sociale (CNSS) in Lebanon, and an effective member of the Lebanese Economic and Social Council. He graduated from the University of Grenoble in France in 1979 with a PhD in economics, and began his career teaching International Economics at the Lebanese University, carrying out at the same time several studies as a full time researcher at CERMOC. Between 1985 and 1991, he was nominated as the Director of Research & Studies at the Union of Arab Banks (UAB) and played a key role in inter-Arab cooperation on banking issues. Over 1998-1999, he contributed significantly to the elaboration of the Lebanese government’s five-year Financial Reform Program and headed up the Banking Commission within the Syro-Lebanese Businessmen Council.

TBY talks to Dr. Makram Sader, Secretary General of the Association of Banks in Lebanon, on regulation, the dollarization of the economy, and keeping the sector competitive.

The Lebanese parliament recently passed four financial bills to comply with global financial standards. How will these laws enhance the regulatory framework for the banking sector?

The bills approved by the Lebanese parliament in 2015 are fundamental, since they uphold the credibility of the Lebanese banking sector and send positive signals for investors within international financial circles. This comprehensive package includes laws regulating anti-money laundering, the declaration of carried cash at the border, the exchange of tax information, and the adherence to UN convention for the suppression of the financing of terrorism. The ABL was an advocate of the importance of these laws to be passed since we needed to strengthen our existing legal framework and comply with anti-laundering international rules. Needless to say, these laws also protect the work and the practice of Lebanese banks at this level vis-á-vis correspondent banks and the international community in general.

One of the main assets of the Lebanese economy is the high level of dollarization it presents. How does this aid the resilience of the banking sector?

The level of dollarization in the Lebanese economy has many advantages and disadvantages depending on the sector. The existing dual currency system largely supports expansion in financial intermediation and contributes to a deeper financial system. Dollarization in Lebanon contributes also to financial stability and offers an insurance policy against large shocks. The ease with which LBP-denominated accounts can be converted into dollar-denominated accounts tends to limit potential withdrawals from the system and financial outflows in upsetting situations. Therefore, high dollarization in Lebanon can be viewed as one of the elements of the resilience of the banking sector.

The banking sector has heavily promoted entrepreneurial projects in Lebanon. What are the main contributions from commercial banks to start-ups and SMEs?

The major contribution from banks to the promotion and development of SMEs is the provision of loan facilities below the market costs of tradition funds, since they grant different forms of subsidized loans to these entities in close relationship to loan guarantors in the country such as Kafalat. These loans also benefit from the deduction in reserve requirements and by stimulating packages of liquidity provided by Banque du Liban at very low rates. Today, the outstanding amount of these loans exceeds USD5.5 billion. Banks also support the growth of the knowledge economy, as they contribute within the limits of 4% of their capital to finance start-up projects, business incubators, and accelerators. The interest from the banking sector in these initiatives has moved them to invest around USD250 million in startup companies and venture capitalists so far, and my guess is that this trend will continue to rise, as the knowledge economy has positioned itself as one of the most promising sectors for Lebanon.

The Lebanese banking sector is highly competitive. How does the ABL work to make things even for smaller players with narrower market shares?

The ABL has always been keen on defending the interests of all its member banks, whether they are Lebanese or non-Lebanese, and small, medium, or large in size. We promote their activities at the domestic and international levels to secure their financing and open new spaces for opportunities to them. We also play an active role in coordinating banks’ efforts on common interest issues. ABL continues as well to raise awareness of developments in regulatory compliance and to support small and medium banks through different means in configuring their compliance frameworks and implementing the necessary rules and processes. For example, we develop and distribute a set of generic policies and procedures manuals on business ethics and consumer protection, anti-bribery and corruption, international sanctions, and AML/CFT and FATCA to all our member banks. ABL also organizes different training activities related to various aspects of banks’ activities, from battling money laundering to human capital training, and through these measures we guarantee a competitive and fair environment for all our member banks regardless of their size or capabilities.



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