MICRO AND SMALL ENTERPRISES IN LEBANON

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Enterprise No Yes Not RequiredRegistered at opening date 4.95 5.43 4.55Acquired official business license at opening date 5.06 5.25 4.35Registered with tax department at opening time 4.96 5.57 4.58Joined social insurance scheme at opening date 4.90 6.30 5.01Enterprise No Yes Not RequiredCurrently registered (industrial or commercial) 4.85 5.38 4.57Currently acquired an official business licence 5.19 5.15 3.91Currently registered at tax department 4.93 5.39 4.60Currently joined the social insurance scheme 4.89 6.38 5.02III.17.8 Technology UsedMSEs that employ up-to-date technologies perform considerably better than those who use traditionalones. Latest technologies play a very important role, mainly in saving time and thus performing tasksmore efficiently.Technology usedtraditional 4.91modern 5.22up-to-date 5.43Use latest technologyNo 5.01Yes 5.42III.17.9 Main Customers & Scope of MarketThe type of the clientele contributes to the level of performance of a firm. According to the indicatorscalculated, the performance of firms with foreign customers is by far the most superior. Theindicators also show that the least performing businesses are those whose main clients are publicenterprises and domestic NGOs. This can be explained by the fact that the scope of work for foreignclients is usually broad.It is thus reasonable to anticipate that MSEs with an international scope of market perform best. Thisinference is in fact supported by an indicator separate from that of the main customers; it shows thatinternational-scope firms perform better than those with local, regional and national scopes.Main customersHouseholds 5.00Government 5.06Public enterprise 4.70Domestic NGO 4.74Foreign NGO 7.08Cooperative 5.96Home based workers 5.26Private sector (
III.17.11 Working Hours per WeekProductivity of workers rises at first to reach a peak, after which it starts to fall. This phenomenon isonly normal; it supports the theory of labour productivity in economics. According to theperformance indicators, the peak is at 48 working hours per week, which means that beyond thispoint, employees tend to work more inefficiently due to many reasons, exhaustion being one. Thistrend remains valid until working hours per week reach 72, after which productivity boosts again. Inthis case, a double-shift system is installed, representing nearly the same productivity, and thusperformance, as that of a single-shift one.Working hours/week48h and less 5.2948h-60h 4.8960h-72h 4.75more than 72h 5.28III.17.12 Geographic LocationThe geographic location also affects the performance of enterprises. Our indicator shows that MSEsin Beirut perform best and those in Bekaa record the least performance, compared to otherGovernorates. This is only logical due to the urban vs. rural nature of the locations mentioned.LocationBeirut 6.45Mount Lebanon 5.36Bekaa 4.04North 4.88South 5.17IV. RecommendationsThe importance of the contribution of the private sector to the Lebanese economy cannot behighlighted more. Similarly, the importance of micro and small enterprises has always characterizedthe economy of the country, a fact further confirmed in the current research. This indicates theimportance of supporting micro and small enterprises as one of the pillars for any long-termdevelopment strategy in the country.This is especially pertinent in terms of pro-poor development strategies, where these enterprises aremostly owned and operated by poorer groups of the society. Such enterprises are easy to support, theyrequire low capital per job created, they have the ability to generate a number of job opportunities toabsorb the growing labor force, and they target women, and those who have no other source ofincome. However, these enterprises are vulnerable to shocks, they lack access to financial assets andthey are not covered by social security schemes.The recommendations of this study are divided into the following five categories. It should be notedhowever that the effectiveness of these recommendations is conditional to pursuing macroeconomicreforms pertaining to infrastructural, fiscal, sectoral, and employment policies.1. Providing and supporting an enabling policy environment for MSEs• One of the more important conclusions of the study is the need for the inclusion of purposefulenterprise development strategies, guided by an overall vision of development.• An enabling legislative framework should be developed to facilitate and encourage engagement inthe formal, micro, and small scale enterprises. This will ensure their proper development,increased competitiveness, efficiency and sustainability.• This also needs providing incentives for enterprise establishment and growth, includinglicensing/registration procedures, regulating taxation, tax administration, customs fees, and costsof essential services in a way that would assist these MSEs. These incentives concernaccessibility to imports and domestic raw material.• There is a need to strengthen legislation related to membership of MSEs in professionalorganizations in order to tap into resources and partnerships.46
Page 1 and 2: ERF RESEARCH REPORTProject on “Pr
Page 3 and 4: III.17.3 Clusters------------------
Page 5 and 6: AcknowledgementThis is the first re
Page 7 and 8: By presenting this unique, serious
Page 9 and 10: The overall environment in Lebanon
Page 11 and 12: 3.6 Major ConstraintsThe most promi
Page 13 and 14: The distribution of entrepreneurs a
Page 15 and 16: project includes a field survey, th
Page 17 and 18: the same probability to be selected
Page 19: Table 8: MSE Distribution per Gende
Page 23 and 24: person enterprises is an evidence o
Page 25 and 26: Figure 3: Distribution of MSEs Acco
Page 27 and 28: Most of the surveyed MSEs operate i
Page 29 and 30: The survey also showed that larger
Page 31 and 32: The percentage of MSEs that are not
Page 33 and 34: Finally, it appears through the rel
Page 35 and 36: practiced. Nevertheless, value adde
Page 37 and 38: III.12.6 Value-added and technology
Page 39 and 40: of age compared to 19% of male entr
Page 41 and 42: Table 26: Age (current) Distributio
Page 43 and 44: The entrepreneurs opted to change o
Page 45 and 46: Table 34: Mixed Income and Sector o
Page 47 and 48: • Acquisition of modern technolog
Page 49 and 50: frequency distribution do not show
Page 51: do not belong to a cluster achieve
Page 55: • Effective quality assurance mec

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