Libyan Arabic and legal usage includes دين or دَين (dayn) for debt, قرض (qard) for a loan and تمويل (tamwil) for financing. Household debt is often informal: a World Bank and REACH sample from 15 assessed municipalities found that 35% of households reported debt to family, friends or employers. The main reported uses were basic needs at 47%, healthcare at 46% and food at 40%. The figures are not a national prevalence estimate. Reported levels were 51% in Albayda and 50% in Derna, and settlements were usually negotiated directly rather than through a nationwide debt-counselling service. Formal bank credit is available but access and terms vary by bank. CBL data recorded 33.8 billion LYD in bank credit in 2025, including 26.8 billion LYD to the private sector, or 79.2% of the total. Murabaha, including social advances, accounted for 17.1 billion LYD, or 50.7% of total credit. Retail Murabaha and salary advances are more common than corporate credit, while eligibility, markup, fees, insurance, duration, collateral and guarantors remain bank-specific. Credit stood at about 32.8 billion LYD in the first quarter of 2026, about 2.9% below the end of 2025. Non-performing loans, commonly called NPLs, represented 19.3% of the recorded portfolio. An NPL is a credit with repayment problems serious enough to require special treatment under credit-reporting or banking rules. Libya's legal and financial framework uses Islamic-finance terminology, but Murabaha should not automatically be treated as an interest-bearing loan. Law 1/2013 addresses the prevention of riba transactions, and Law 74/1972 makes riba clauses in civil or commercial transactions between natural persons void. The Islamic-finance framework remains incomplete according to CBL and IMF reporting. A bank contract still needs to be checked for the actual sale, markup, fees, security and payment schedule rather than judged by its label alone. The CBL portal launched on 24 January 2024. Under Circular 4/2023, banks submit and update credit data for natural and legal persons, query the LCIC before granting or renewing credit, report changes and report arrears. CBL-KEY access can be suspended until settlement or another status resolution. Banks and the LCIC have confidentiality duties, but a borrower-facing access and correction procedure was not clearly evidenced in the reviewed official CBL material. A borrower dealing with arrears should first contact the bank, request a written balance and instalment schedule, ask for written settlement or restructuring terms, and verify the LCIC record and CBL-KEY status. Libya has no evidenced universal statutory consumer restructuring process. An informal debt should be documented in a bilateral repayment agreement stating the amount, dates, instalments and proof of payment. A creditor can sue and enforce assets when the legal requirements are met. Execution generally requires an enforceable title and service of notice. Movable property is generally subject to seizure only after at least one day from service. A real-estate execution notice states the debt and title and gives 30 days before forced sale. The debtor may object, and a sale may be deferred where the property's net annual yield can cover the creditor's claims within one year. Notices, lawyers, experts, execution and sale create additional costs, while the current fee tariff was not reliably verified. Under Law 74, when a known and undisputed monetary debt exists and the debtor is capable of paying, a court may allow up to three months for payment and then imprisonment until payment; asset execution can still remain possible. The application and current practice require local legal review. Social-security, retirement, social-insurance and military pensions and other cash benefits receive a specific protection under Article 42 of SSF Law 13/1980: seizure or deduction may not exceed one quarter of the monthly amount. Priority is given to alimony, then public-body debt, then other debt. The Social Security Fund may collect its own dues and may administratively seize assets of liable entities. Actual payroll-deduction practice can vary. Public debt is a separate macroeconomic matter. Institutional and political division has fragmented reporting, and IMF reporting for 2026 put Libya's 2025 fiscal deficit at about 30% of GDP and public debt at about 146% of GDP. Government advances financed by the CBL in LYD have been described as carrying zero interest and no fixed repayment schedule, with possible administrative forgiveness; they are therefore not equivalent to an ordinary household or business loan. Ministry of Finance and state-budget bodies remain relevant to this public-debt context. Commercial businesses can use bankruptcy, a creditors' union or preventive composition under Law 23/2010 on Commercial Activity and related commercial-code rules. A preventive composition requires a secured commitment to pay at least 40% of ordinary debt within six months, although the court or creditors may allow an extension. No consumer personal-insolvency, discharge or fresh-start system was evidenced in the reviewed official sources. After settlement, the debtor should keep proof of payment, request the bank and LCIC to update the record, and resolve any CBL-KEY status linked to the settlement. Libya has no evidenced general automatic deletion or rehabilitation period for consumer debt.
Debt in Libya
Debt in Libya is money or another performance that a debtor owes and must repay or provide under an agreement, law or settlement. It includes bank financing, Murabaha and salary advances, unpaid obligations to family, friends or employers, arrears, public debt and commercial insolvency. Formal debt services are fragmented across the Central Bank of Libya (CBL), banks, the Libyan Credit Information Center (LCIC), courts and other bodies, while many households negotiate directly with people or employers. The practical outcome depends on the debt type, available evidence, repayment status, security and whether the matter reaches enforcement.
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