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Aoun Says 'Keep Backing Middle Class' as Housing Bank Toughens Terms

Feb 14

President Michel Aoun on Tuesday urged banks to continue to offer loans aimed at propping up the country's middle class, after Banque de L'Habitat (housing bank) toughened its lending terms.

Aoun voiced his remarks during a meeting with a delegation from the Association of Banks in Lebanon.

“The president instructed us to continue to offer loans that support the middle class,” ABL chief Joseph Torbey said after the meeting.

“There is great confidence in the financial sector and in the central bank that oversees these issues,” Torbey added, reassuring that “we are not in a crisis.”

Central Bank Governor Riad Salameh meanwhile held talks with Prime Minister Saad Hariri at the Grand Serail.

The meetings come after the central bank issued a memo adjusting the interests of loans backed by it and amid reports that the housing banks has sharply toughened its lending terms.

According to reports, the housing bank has raised the interest rate from 3% to 3.75% as it lowered the payment period from 30 to 20 years. The interest rate for Lebanese expats was meanwhile raised from 2% to 2.75% with an unchanged 30-year payment period.

Under the new reported terms, the bank will also withhold loans from anyone who inherits a house outside Beirut and anyone who benefited from a housing bank loan in the past.

A central bank source meanwhile told LBCI TV that the central bank “has nothing to do with measures taken by the housing bank or commercial banks regarding housing loans.”

“These measures are part of the policy of each bank,” the source added.