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By Andrew Raven

Stepping inside Baker's Bake, a small, family-run bakery in Beirut, is a feast for the senses. The shop, owned by Tony Bou Dagher, is filled with the aroma of oven-fired man’ousheh, a traditional Lebanese flatbread.

Baker's Bake, which opened in 1994, has always been popular, and Bou Dagher had long harbored a dream of opening a second location. But that required cash, and for years, he had been turned down by local banks, which often shy away from lending to small businesses.


Then he came across Bank Audi, an IFC partner. The bank gave Bou Dagher an $80,000 loan that helped him open a second Baker's Bake in Beirut. "The loan helped me a lot in achieving my dreams and creating a stable foundation for my family," says Bou Dagher, a father of two.

Results like that are the reason that IFC began partnering with Bank Audi in 2015. IFC provided the bank with detailed advice on how to launch a pioneering SME banking program that included collateral-free small business loans – and since Bank Audi joined forces with IFC, it has served 5000 small businesses. The project is part of a larger effort by IFC to extend financial services to small businesses across the Middle East and North Africa (MENA), creating jobs and jump-starting growth along the way.

“This transformation enabled Bank Audi to cater to the needs of very small enterprises and set a foundation for an impactful and profitable small and medium-sized enterprise (SME) banking business for Bank Audi,” says Qamar Saleem, Global Lead of the SME Banking Practice for IFC.

Baker’s Bake in Beirut received $80,000 from IFC client Bank Audi to open a second bakery.

Helping Small Businesses Grow

Despite making up the vast majority of businesses, SMEs in MENA receive just 8 percent of all bank lending, limiting their ability to expand.

"Lebanon is a small country so when we say that the bank disbursed 5,000 loans in two years’ time, that’s a big number," says Hassan Sabbah, Head of SME Banking at Bank Audi. “SMEs are the engine of the Lebanese economy and our lending has had a big impact.”

Small and medium-sized enterprises constitute over 90 percent of business in Lebanon and account for around 80 percent of private sector employment. Unlocking their potential is the key to spurring growth in Lebanon and providing its people with a better future, says Sabbah.

Family-owned Modern Machine Shop got a $450,000 loan to upgrade its manufacturing equipment.

Modern Machine Shop, a family-owned business that manufactures truck parts, can testify to that. The company recently borrowed $450,000 from Bank Audi to upgrade its manufacturing equipment.

"With the loan, I was able to take the business to a new level by computerizing my machinery,” says Youssef Abou Khater, the company’s General Manager. He believes that the success of Bank Audi’s newly launched SME business line has also prompted other banks to take a hard look at smaller manufacturers who have long been unserved.

Bou Dhager, from Baker’s Bake, is already on the way to achieving his goals. After he expanded his bakery business, he was able to send his two daughters to a good school and start saving for the future. Now he’s looking to fulfill his life-long ambition of taking Baker’s Bake international with a franchise agreement.

"My dream is close to becoming reality, thanks in large part to the [Bank Audi] loan,” he says.

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Published in July 2019