World Bank loan expands cash support in Lebanon

As Lebanon faces deepening economic strain alongside the war, a $200 million loan from the World Bank has been approved to expand cash assistance to vulnerable households.

The approval comes as Lebanese Finance Minister Yassine Jaber traveled to Washington for the spring meetings of the International Monetary Fund (IMF) and the World Bank, held from April 13 to 18. In a statement following meetings, Jaber described a “productive and constructive” discussion with IMF Deputy Managing Director Nigel Clarke, focused on Lebanon’s economic challenges, reform priorities, and continued engagement and support. The loan is aimed at expanding direct support to households at a time when demand for assistance has sharply increased.

Expanding cash assistance

The financing builds on existing World Bank–supported programs in Lebanon, such as the 2021 Emergency Social Safety Net, which provides direct cash assistance to low-income households. According to project data, the program has reached hundreds of thousands of households since its introduction, with monthly payments designed to offset rising living costs. It is structured to support around 150,000 households at a time, with transfers averaging between $20 and $25 per person per month, adjusted for household size.

The latest loan continues that process by extending support to Lebanese households facing ongoing economic pressure. It also aligns with similar programs implemented in countries such as Jordan and Egypt, where targeted transfers are used to stabilize consumption among low-income households. While the amount is modest relative to overall needs, it helps sustain basic consumption among vulnerable groups.

Rising needs

Lebanon’s reliance on such programs has increased over time. Before 2019, social protection spending was limited, and much of the population relied on income from employment, remittances, or private transfers. The financial crisis disrupted these sources, while inflation eroded purchasing power. Since 2019, the Lebanese pound has lost more than 95 percent of its value, according to World Bank estimates, while poverty rates have risen to more than 70 percent of the population.

Food insecurity has also risen sharply. A 2023 joint assessment by the World Bank and the Food and Agriculture Organization found that a growing share of households are unable to meet basic dietary needs, with many reducing food consumption or shifting to lower-cost alternatives.

Recent conflict dynamics have added further pressure. Since the escalation of hostilities, more than one million people have been displaced across Lebanon, according to the most recent government data. Over 140,000 are currently sheltering in collective sites, including schools and public buildings. Displacement has reduced income opportunities and increased demand for assistance, particularly in urban areas where costs are higher.

Lebanon’s population, estimated at around 5.8 million before the crisis, has long included a large refugee population, placing additional strain on public services and assistance systems. The latest wave of displacement adds to that pressure, increasing demand for housing, food, and basic support.

At the same time, economic activity has slowed. Lebanon’s Ministry of Economy and Trade estimates daily losses linked to the conflict at between $60 million and $80 million, driven by disruptions to trade, tourism, and domestic activity. Higher transport and insurance costs have affected imports, while business closures in affected areas have reduced local output. In this context, the expansion of cash assistance programs has taken on a central role.

Limits of recovery

World Bank-supported safety nets are designed to deliver targeted support efficiently, using centralized social registries to identify beneficiaries. In Lebanon, these programs have been scaled up in response to crisis conditions, with funding largely provided by international donors.

Research by the World Bank shows that cash transfers can help reduce poverty rates, support food consumption, and limit detrimental coping strategies, such as reducing spending on health or education. In an economy where formal employment has declined and real wages have fallen, these effects are particularly relevant.

At the same time, broader recovery remains constrained. The IMF has repeatedly highlighted the need for further reforms, including fiscal adjustments, banking sector restructuring, and improvements in governance. Progress on these fronts has been limited, delaying access to greater financial support.

As a result, targeted programs have become a primary mechanism for addressing immediate needs. The new loan fits within that framework, expanding an existing system and supporting basic consumption in a period of continued instability.