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The Portland Trust is committed to promoting peace and stability between Palestinians and Israelis through economic development.

Loan Guarantee Scheme

A study by The Portland Trust identified that Small and Medium-sized Enterprises (SMEs) were one of the driving forces behind the Palestinian economy and were more resilient in the face of the conflict and the political uncertainty than other sectors. But they faced enormous hurdles in accessing finance. The banks were reluctant to lend finance because of the risks involved. These risks translated into high collateral requirements on the part of the SMEs.

The Portland Trust looked at ways of underwriting lending. The Portland Trust worked closely with The Aspen Institute, Overseas Private Investment Corporation (OPIC) and the Palestinian Investment Fund (PIF) to develop a loan guarantee scheme for the Palestinian Territory. The OPIC/PIF scheme was launched in July 2007 with $160 million of funds to guarantee loans up to a total of $228 million. Loans from $10,000 to $500,000 are backed by a 70% guarantee. The scheme targets a range of businesses and plans to establish a technical assistance programme to help banks market their financial products more successfully. The Portland Trust is contributing financially to its running costs.

The Portland Trust also engaged European finances for loan guarantees through a
combination of lobbying and analytical work that demonstrated the potential demand. The European Investment Bank and European Commission jointly provided an additional €24m for loan guarantees which was combined with €5m of funding from the German Development Bank, KfW. The €29m European-Palestinian Credit Guarantee Fund was launched in 2006.

For more information:

Financing Palestinian SMEs
OPIC
ASPEN Institute

 

British registered charity no: 1106429