Key Takeaways
- • The Arab Fund for Economic and Social Development (AFESD) transferred $16.123 million as the fourth installment of a $165 million loan commitment to Lebanon's Housing Bank, bringing total disbursements to approximately $70 million over five months.
- • The $165 million facility (equivalent to 50 million Kuwaiti dinars) enables the Housing Bank to fund subsidized housing loans for low- and middle-income borrowers, with loan ceilings raised from $50,000 to $100,000 per borrower as of June 2025.
- • Housing Bank chairman Antoine Habib confirmed that all amounts received to date have been fully allocated to active lending, with the program designed to support over 1,000 borrowers across Lebanon for home purchase, rehabilitation, or new construction.
- • The subsidized housing loan program was relaunched in June 2024 after a five-year suspension, with disbursements commencing later that same month, addressing Lebanon's severe financial crisis that has affected over 80% of the population.
- • The Housing Bank benefits from favorable terms on the Arab Fund facility, including a 2.5% interest rate on the loan while charging borrowers rates set by Lebanon's Central Bank, supporting continued lending activity in the residential sector.
Summary
The Arab Fund for Economic and Social Development, a Kuwait-based multilateral development finance institution, has advanced the fourth tranche of its $165 million loan program to Lebanon's Housing Bank (Banque de l'Habitat), transferring $16.123 million according to bank chairman Antoine Habib. This disbursement represents a critical component of Lebanon's efforts to restart subsidized housing finance amid the country's ongoing economic crisis.
The cumulative disbursements through this fourth installment total approximately $70 million over a five-month period, representing 42% of the overall $165 million commitment (valued at 50 million Kuwaiti dinars). The facility was committed by the Arab Fund in 2025 and has enabled the Housing Bank to materially expand its lending capacity. In June 2025, the bank increased its subsidized loan ceiling from $50,000 to $100,000 per borrower, a significant expansion that reflects the growing availability of concessional capital.
According to Habib's statement, all funds received to date have been fully deployed into active housing loans, with the program designed to serve low- and middle-income borrowers in both public and private sectors, as well as individuals with special needs. The proceeds finance home purchase, rehabilitation of existing structures, and new construction on borrower-owned land. The Housing Bank relaunched its subsidized housing program in June 2024 following a suspension of more than five years, with disbursements to borrowers commencing shortly thereafter.
The loan carries favorable concessional terms: the Housing Bank itself pays a 2.5% interest rate to the Arab Fund, while borrowers are charged rates established by Lebanon's Central Bank. The facility is structured as a 30-year soft loan, providing long-term financing stability. Habib emphasized that the Arab Fund's larger package was specifically designed to support continued lending momentum in the residential sector, positioning the institution to potentially request additional financing from the fund in future cycles.
The cumulative disbursements through this fourth installment total approximately $70 million over a five-month period, representing 42% of the overall $165 million commitment (valued at 50 million Kuwaiti dinars). The facility was committed by the Arab Fund in 2025 and has enabled the Housing Bank to materially expand its lending capacity. In June 2025, the bank increased its subsidized loan ceiling from $50,000 to $100,000 per borrower, a significant expansion that reflects the growing availability of concessional capital.
According to Habib's statement, all funds received to date have been fully deployed into active housing loans, with the program designed to serve low- and middle-income borrowers in both public and private sectors, as well as individuals with special needs. The proceeds finance home purchase, rehabilitation of existing structures, and new construction on borrower-owned land. The Housing Bank relaunched its subsidized housing program in June 2024 following a suspension of more than five years, with disbursements to borrowers commencing shortly thereafter.
The loan carries favorable concessional terms: the Housing Bank itself pays a 2.5% interest rate to the Arab Fund, while borrowers are charged rates established by Lebanon's Central Bank. The facility is structured as a 30-year soft loan, providing long-term financing stability. Habib emphasized that the Arab Fund's larger package was specifically designed to support continued lending momentum in the residential sector, positioning the institution to potentially request additional financing from the fund in future cycles.
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