Libya’s Central Bank launches Interest-Free E-Payment Loans

Libya’s Central Bank announced Wednesday that all commercial banks operating in Libya can now offer interest-free loans for electronic purchases to help citizens cope with the country’s ongoing liquidity crisis.

The initiative, outlined in Circular No. 20 by the Banking and Currency Control Department, permits banks to extend credit limits of up to 60 percent of customers’ net salaries, exclusively for electronic transactions through existing banking platforms.

Operating under the Islamic banking principle of “Qard Al-Hassan,” the program targets customers who receive regular salary deposits through their bank accounts but struggle with cash accessibility.

“This measure recognises the state of necessity and aims to prevent delays in citizens’ access to their salaries,” the Central Bank of Libya (CBL) said in its directive to commercial banks.

The new policy represents the CBL’s latest effort to address periodic liquidity shortages while promoting digital banking solutions in the North African nation. All banks licensed to operate in Libya are required to comply with the circular’s guidelines.

The credit facility applies solely to electronic payment operations conducted through banks’ existing digital services, including online banking platforms and electronic payment systems available to account holders.

Libya has faced persistent liquidity challenges in recent years, pushing the banking sector to adopt more digital payment solutions. This latest measure aligns with broader efforts to modernise the country’s financial infrastructure while adhering to Islamic banking principles.