Palestinian Loan Guarantee Schemes
The Portland Trust, the Aspen Institute, the US Overseas Private Investment Corporation (OPIC) and the Palestine Investment Fund (PIF) designed a Palestinian loan guarantee facility to encourage banks to extend credit and boost the provision of affordable finance for Palestinian small and medium enterprises. A $500m facility was launched in July 2007, with $72m coming from PIF, the remaining balance was funded by OPIC, IFC, Bank of Palestine and Ciro Amman Bank. The scheme guarantees loans up to a total of $500m. Loans from $10,000 to $500,000 are backed by a 70% guarantee. At the end of October 2010 around $67m of loans had been guaranteed, benefiting 354 SMEs and creating an estimated 3,500 jobs. The scheme targets a range of businesses and includes a technical assistance programme to help banks market their financial products more successfully. Samir Hulileh sits on the Loan Guarantee's advisory board working to maximise its impact. The Portland Trust contributed financially to the scheme's running costs in 2008.
To see the latest quarterly update on the scheme's activities published by MEII please click here.
The Loan Guarantee Scheme is administered by CHF International. For further information please refer to their website.
For more information:
Financing Palestinian SMEs
OPIC
ASPEN Institute
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. By the end of September 2010, EPCGF had approved 1,551 loan guarantees, totalling €35m ($47m).
