Breaking the Bank: Alternative Pathways to Lebanons Broken Banking Sector
In the absence of relevant legislation, informal capital controls and the currency crisis, Lebanese small and medium depositors are not only confronted by a harsh devaluation of their savings, but also enormous challenges to gain access to their deposits. Are there alternative options for the Lebanese to store value, preserve wealth and run Lebanon’s finances? Investing in physical assets can be unsustainable; vulnerable to theft and unexpected market collapse, the trend for luxury cars and real estate is likely to be short-lived. In our latest policy paper authored by our partner Triangle, we explore the option of credit unions and other types of financial cooperatives. These could have the power to diversify Lebanon’s homogeneous banking sector. This, in turn, could serve Lebanon well in the rocky years ahead: research shows that when banks do poorly, credit unions often do much better.