The Tripoli based Minister of Economy and Trade, Mohamed Al-Hwej, issued a Ministerial decision yesterday approving the regulations for granting guarantees to the credit fund.
The fund works to guarantee a proportion of the risks facing financial institutions operating in Libya, such as banks, to finance economically viable projects.
It is hoped that the decision, reducing the exposure of banks to business loan risks, will encourage banks to take more risk in giving out loans to businesses and help motor the private sector Libyan economy.
It will be recalled that Libyan banks, and state banks particularly, are siting on billions of dinars in their coffers which they are unwilling to loan out to businesses as they feel they do not have adequate legal cover to reduce their risk of losing this money.
The decision coincides with Libya signing an MoU yesterday with the Islamic Development Bank Group (IsDB) to establish the National Fund for Economic Empowerment.
