By Nibal Zgheib
The European Bank for Reconstruction and Development (EBRD) is supporting Palestinian micro, small and medium-sized enterprises (MSMEs) and women entrepreneurs by providing a financing package of US$ 15 million to Bank of Palestine, the largest bank in the West Bank and Gaza.
MSMEs are at the core of the Palestinian economy, representing more than 98 per cent of the local economy. However, only a quarter are owned by women. Exacerbated by the coronavirus pandemic, access to funding remains a constraint to the growth of many small businesses.
The package includes a US$ 13 million credit line to small businesses, providing them with critical liquidity to help mitigate the impact of the coronavirus pandemic. This credit line will help Bank of Palestine provide short-term loans to MSMEs facing liquidity strains due to a decrease in their activities and turnover caused by the crisis.
Under the EBRD’s Women in Business programme, a dedicated US$ 2 million loan – the first loan of its kind from an international financial institution in the West Bank and Gaza – will support women-led businesses, helping them to access necessary funds and create more job opportunities. The loan will be accompanied by a first-loss risk cover mechanism to enable the bank to test new products and offer more favourable lending conditions to women-led businesses and thus improve their access to finance.
A technical assistance programme, supported by The Netherlands through the EBRD Multi-Donor Trust Fund for West Bank and Gaza, will help the bank to strengthen its capacity in lending to women-led businesses, including improvements in product development, risk management and marketing.
Through the Women in Business programme, women can also access key entrepreneurial know-how through advisory service projects with training, mentoring, network-building and longer-term coaching, providing the knowledge and confidence to take the next step in growing their businesses.
EBRD’s First Vice President, Jürgen Rigterink said: “We are very proud to be the first financial institution to dedicate a credit line to the Palestinian women entrepreneurs. This is in line with our strategy to create equal economic opportunities for women and we are delighted to achieve this step in partnership with Bank of Palestine. Also our continuous support to small businesses is more important than ever during this period to tackle the impact of the pandemic on the economy.”
Chairman of Bank of Palestine Group Hashim Shawa said: “We view the signing of this loan agreement with the EBRD as further evidence of our joint vision at sustaining and growing the SME business with an added focus on lending to women. The agreement will enable us to continue our role in supporting the real economy not only with a financing package but with technical assistance and a partnership with the EBRD built on solid common values”.
Since the start of its operations in the West Bank and Gaza in 2017, the EBRD has signed eight projects for a total amount of US$ 46 million.
