US$ 30 million MSME credit line to Bank of Palestine.

Loan for on-lending to eligible MSMEs to help to maintain their operations

Financial package to strengthen the local economy following the escalation that started in October 2023 and the subsequent economic challenges

The European Bank for Reconstruction and Development (EBRD) is supporting Palestinian micro, small and medium-sized enterprises (MSMEs) by providing a financing package of US$ 30 million to Bank of Palestine, the largest bank in the West Bank and Gaza and an EBRD client since 2020.

MSMEs are at the core of the Palestinian economy, representing more than 98 per cent of the local economy and contributing to over 60 per cent of gross domestic product, but have been facing multiple economic challenges after the escalation which started in October 2023. Recent estimates indicate that the local economy contracted by at least 6.4 per cent at the end of 2023 due to employment losses and rising security tensions which affected mobility and business activity.

Proceeds of the facility will be used for on-lending to eligible private MSMEs based in the West Bank to address their liquidity needs, enable them to maintain their operations and contribute to building the resilience of the local private sector.

The facility builds on the EBRD's successful experience of extending a small and medium-sized enterprise (SME) loan of US$ 13 million and a Women in Business loan of US$ 2 million to Bank of Palestine in December 2020.

Francis Malige, EBRD Managing Director for Financial Institutions, said: 'We are very pleased to be signing this loan with Bank of Palestine today. The EBRD is a bank for both good and bad times. We are very proud of Bank of Palestine's resilience, and we know that, with this loan, more Palestinian SMEs will receive the financing they need to get through these difficult times.'

Hashim Shawa, Chairman of Bank of Palestine Group, said: 'We view the signing of this loan agreement with the EBRD as further evidence of our joint vision for sustaining and growing MSME businesses, particularly during these unprecedented times. This loan will enable us to continue our role in supporting the real economy and helping it to address the current challenging political and economic environment.'

Since the start in 2017 of its activities in the West Bank and Gaza, which are conducted through a trust fund, the EBRD has signed 23 transactions worth a total of EUR116 million.

(C) 2024 Electronic News Publishing, source ENP Newswire