Giving Syrian SMEs a chance to thrive

Innovative blended finance model delivers credit services to boost livelihoods in Northern Syria.

A philanthropy-backed social enterprise is offering SMEs in Northern Syria access to credit to help kick-start the economy and boost living standards. Siraj Financial Services (SFS) has been established by the Near East Foundation (NEF) operating as a non-banking financial institution (NBFI), upscaling and commercialising the successful micro and small enterprise financing program, which NEF has been running in the region since 2021.

To date, Siraj Financial Services (previously known as the Revolving Credit Fund, RCF) has dispersed 3,500 loans totaling US$4m to Syrian SMEs.

It has an active portfolio of $2.2m, serving 2,750 active clients across ten branches in Deir ez-Zor, Al-Hasakah, Aleppo, and Raqqa governorates throughout North East and North West Syria. The loan default rate currently stands at less than 1percent.

By 2027, SFS aims to raise $15m in grant funding and more than $10m in debt and equity through a blended finance structure to support a portfolio of 23,000 clients.

SFS is backed by the Syria Recovery Trust Fund (SRTF), a multi-donor trust fund backed by governments and development banks, the United States Agency for International Development (USAID), the US’ overseas aid body, and the Switzerland-based Vitol Foundation, the philanthropy of multinational energy conglomerate, Vitol.

Describing SFS as "progress beyond programmes," Gayle Schwartz, senior economic policy advisor at USAID, said: “We are not naïve about the security, political and economic challenges in Syria, but we also see a great deal of opportunity. Fragility, or having very little of your own, often breeds innovation. What we have seen from the entrepreneurs is incredible resilience and innovation.”

John Ashby, president of NEF, added: "The incorporation of SFS signifies a major milestone in supplying unmet demand for micro and small enterprise financing in Northern Syria and provides a huge opportunity for attracting non-traditional partners and funders."

"What we have seen from the entrepreneurs is incredible resilience and innovation."

Gayle Schwartz, senior economic policy advisor, USAID.

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Giving SMEs access to credit uplifts the local economy and helps raise living standards across the board. Photo: Shutterstock.

SFS’s loan products include micro, development, and growth loan products ranging from $500 to $8,000 with up to 24-month repayment terms. For people working in agriculture and innovation, larger loans of up to $60,000 are also available. All credit is supported by coaching, mentoring and facilitation from NEF’s digital platforms, Siraj Digital and Siraj Market.

Eng. Hani Khabbaz, SRTF director general, said: “We are very proud of the SFS (previously the Revolving Credit Fund or RCF) and its resounding success in North of Syria.

“This initiative is not only securing growth and sustainability for enterprising individuals and their families… but (it) also bestows a ripple effect of prosperity upon the entire local economy,” noted Hani Khabbaz, director general of SRTF. “By focusing on supporting women and youth, the SFS has become a beacon of hope, fostering inclusive development that uplifts communities and fosters lasting positive change.”

John Collenette, CEO of the Vitol Foundation, added: “We are proud to have contributed to this initiative as it continues to provide critical support to MSEs in the region”.

An independent board has been formed to oversee SFS comprising representatives of NEF and its partners. Ziad Al Refai, the former CEO of Tamweelcom, one of Jordan’s leading microfinance institutions, has been named managing director.

Founded in 1915, NEF is a US-headquartered international NGO focused on education, community organising, and economic development in the Middle East and Africa. It currently opeates in Iraq, Jordan, Lebanon, Palestine, Morocco, Sudan, Syria, Mali, and Armenia.

SRTF was established in 2013 by the Germany, the United Arab Emirates, and the US, together with the National Coalition of Syrian Revolutionary and Opposition Forces (SOC), to be a legitimate representative of the Syrian People, with German Development Bank KfW as a trustee. Japan, the UK, Italy, Turkey and Kuwait and others have come on board since.

The donors pool their funds to finance priority projects for essential services in sectors such as water, health, electricity, education, food security, solid waste removal, as well as other sectors including rule of law, agriculture, transportation, telecommunication, public enterprise, and housing. - PA