Borrowing in Libyan dinars: an overview of financing
In Libya, borrowing almost always means going through a commercial bank that uses Islamic contracts such as murabaha, because Law No. 1 of 2013 bans interest-bearing loans, all under the supervision of the Central Bank of Libya in Tripoli.
A Libyan banking sector dominated by the state
Jumhouria Bank, National Commercial Bank, Wahda Bank and Sahara Bank, all majority state-owned, hold most of the deposits of civil servants. Alongside them, Aman Bank, Mediterranean Bank and Andalus Bank serve private customers concentrated in Tripoli, Benghazi and Misrata.
What the Central Bank of Libya does
The Central Bank of Libya issues the Libyan dinar (LYD), divided into 1,000 dirhams, licenses banks and sets their lending ceilings through circulars. Its governor Naji Mohammed Issa, appointed in 2024, also leads the electronic payment and housing finance projects.
Law No. 1 of 2013: the end of interest-bearing loans
Passed in January 2013, the law banning usurious transactions forced banks to abandon conventional lending. In 2019, the Supreme Court clarified that the ban covers credit operations, which leaves commercial late-payment interest in place.
Murabaha, ijara and qard hasan at the counter
In practice, the bank buys the asset and resells it with a margin known in advance, paid in monthly instalments deducted from salary. Ijara is used for lease-to-own deals, while qard hasan is a margin-free advance, often limited to salaried account holders.
The Libyan Credit Information Centre
In 2024 the Central Bank gave the Libyan Credit Information Centre a new legal framework. Lenders report their customers' commitments, identified by national number, and check this register before granting any new murabaha.
Credit backed by public-sector pay
With roughly three quarters of jobs in the public sector, a state salary paid into the bank remains the core guarantee. Banks deduct instalments at source, which explains the dominant role of salary-based personal financing in Libya.
Housing: restarting projects stalled since 2010
In 2025, the Central Bank and the National Housing and Development Programme brought banks together to fund the completion of housing stalled since 2010. A Libyan home loan therefore depends heavily on these public projects and on a clear land title.
Land titles and real collateral
Banks often require collateral covering the full amount, in the form of titled land or a commercial property. Yet land registration was paralysed for a long time, and disputes inherited from Law No. 4 of 1978 on housing still complicate proof of ownership.
Liquidity and electronic payment with LyPay
Since the cash shortages that caused long queues outside branches, the Central Bank has pushed digital payment. Its LyPay service, launched in August 2024, now allows up to 20,000 LYD of monthly purchases and 10,000 LYD of transfers.
Businesses and SMEs seeking credit
Since 2022, the Central Bank has asked banks to devote part of their investment portfolio to micro, small and medium enterprises. Financing for Libyan entrepreneurs nonetheless remains scarce, for lack of suitable Islamic products and titled collateral.
Car murabaha, the banks' flagship product
Financing cars through murabaha, repaid by salary deduction, is among the most profitable activities of Libyan banks. It attracts civil servants in Tripoli and Benghazi alike, even though the margins accumulated over several years often exceed what buyers expect.
A divided country with shifting rules
The coexistence of rival authorities in the west and east long weakened the Central Bank, which was reunified in 2023 and then shaken by the crisis over its governorship in 2024. Banking conditions can therefore change quickly with circulars and public budgets.
Getting bank financing in Libya, step by step
- Open or update an account at the bank that already receives your public or private salary in LYD.
- Ask for a salary domiciliation certificate and check your commitments with the Libyan Credit Information Centre.
- Choose the Islamic formula that fits the need: murabaha for an asset, ijara for a vehicle or equipment, qard hasan for an advance.
- Provide the seller's pro forma invoice, because the bank buys the asset itself before reselling it to you.
- Compare the total resale price, the term and the monthly deduction announced by each bank.
- Sign the murabaha contract, the salary deduction order and, where needed, the collateral deed on a titled property.
What drives the cost of financing in Libya
| Item | Practice observed in Libya | Benchmark |
|---|---|---|
| Murabaha margin | Set in the contract, included in the resale price | Varies by bank and term |
| Salary deduction | Taken at source by the bank receiving the salary | Cited ceiling of 60% of net pay, indicative |
| Processing fees | Flat fee in LYD depending on the bank | Ask for it in writing |
| Real collateral | Titled land or commercial property | Often up to 100% of the amount |
| Late-payment penalty | Governed by Law No. 1 of 2013 | Per contract and sharia |
Documents Libyan banks ask for
- Libyan ID card or passport showing the national number
- Salary and domiciliation certificate issued by the employer
- Bank statements for the last six months
- Family booklet for household applications
- Pro forma invoice for the financed asset
- Title deed or land certificate for real collateral
- Commercial register and business licence for professionals
Common traps for borrowers in Libya
- Signing a murabaha by looking only at the monthly payment, without working out the total resale price paid to the bank over the full term.
- Stacking several financings on the same salary in the belief that the Libyan Credit Information Centre will not see them.
- Offering land without a registered title as collateral, which most banks in Tripoli and Benghazi refuse.
- Paying fees to a so-called intermediary on Facebook who promises fast financing in dollars or dinars.
- Switching the bank that receives your salary without telling the lender, which triggers missed payments and a frozen file.
Lenders to contact
- National Commerce Bank (NCB): Libyan commercial bank offering individual customers a murabaha instalment financing service to fund personal purchases through scheduled repayments.
- Aman Bank: Libyan commercial bank with an Islamic banking offer, providing murabaha financing to its individual and business customers.
- Aman Bank: Libyan commercial bank whose website presents its Islamic banking offering and explains what Sharia-compliant finance means for its customers.
Your questions about credit in Libya
Are interest-bearing loans allowed in Libya?
Not for individuals or companies: Law No. 1 of 2013 bans usurious transactions. Banks therefore offer murabaha, ijara or qard hasan contracts, where the bank's return takes the form of a commercial margin or rents fixed at signing.
Who supervises Libyan banks?
The Central Bank of Libya, based in Tripoli, licenses and supervises commercial and specialised banks. It issues the circulars that set financing ceilings, runs the Libyan Credit Information Centre and develops the LyPay payment service.
Can a private-sector employee get a murabaha?
Yes, if the salary is paid regularly into a Libyan bank account and the employer provides a reliable certificate. Banks remain more cautious than with civil servants, however, and often ask for a guarantor or additional collateral.
Are there microfinance institutions in Libya?
The sector is still embryonic and lacks a clear regulatory framework. Small needs are mostly covered by banks, family or rotating savings groups. Our microcredit page details the alternatives available for small projects.