Report: Dispute between Central Bank and Private Banks ‘Freezes’ Housing Loans

The implementation of a circular issued by Banque du Liban (BDL) on supporting housing loans has not yet begun, although it was issued two months ago, Saudi Asharq al-Awsat reported Saturday.

According to the daily, the reasons were attributed to differences between the Central Bank and private banks -responsible for implementation- over interest rates, the parallel value of amounts paid in foreign currency at the Banque du Liban, and beliefs that the amounts allocated for housing loans are not enough for the Lebanese market.

Central Bank Governor Riad Salameh issued a circular in January related to the reactivation of subsidizing housing loan program in 2019.

In 2018, the Lebanese Public Corporation for Housing (PCH) declared on July 8 that housing loans requests are to be rejected starting July 9th due to lack of funds.

The suspension of the subsidized loans has impacted the country’s real estate sector and thousands of loan applicants.

BDL regularly finances the housing loans through the PCH.

Although the BDL circular was issued after political and economic demands at high levels to stabilize social security, the implementation did not begin, amid official silence on the file, said the newspaper.

The government has not addressed the issue since its formation on January 31.