The torrent of “free” money that Banque du Liban (BDL) Circular 331 was expected to release is still but a trickle. Approved by Lebanon’s central bank in August 2013, the circular allows banks to invest up to threepercent of their tier 1 capital in startup companies, contributing to the so-called “knowledge economy” or venture capital funds focusing on these types of companies. BDL is guaranteeing 75 percent of these notoriously high-risk investments, and – if every bank in the country participates to the maximum limit – the circular would pump around $400 millioninto the local entrepreneurship ecosystem. From an economic perspective, the rationale is simple: create jobs and build up a value-creating new sector. In a best-case scenario, some even hope Lebanon will become a techy, entrepreneurship hub for the region. At this early stage, however, the building blocks for this new sector are only now being put into place.
