Sign in Subscribe
Banks (Finance)

European Investment Bank and Palestine Investment Bank Join Forces to Enhance Access to Finance for Palestinian SMEs

Strategic Insights

— 1 min read

The European Investment Bank (EIB) and Palestine Investment Bank have collaborated to provide a USD 20 million line of credit to support Palestinian small and medium-sized enterprises (SMEs) as part of the EU's overall response to the Covid-19 crisis. The operation is a key component of Team Europe's strategy to promote sustainable social and economic recovery in the region. Flavia Palanza, Director of Neighbouring Countries Department at the EIB, emphasized the importance of this partnership, stating that it aims to provide vital financing for businesses and sustain jobs in the midst of the current crisis.

Key Takeaways:

  • The EIB and Palestine Investment Bank have partnered to provide a USD 20 million line of credit to support Palestinian SMEs, primarily in response to the Covid-19 crisis.
  • The operation is part of Team Europe's overall response to the Covid-19 crisis, aiming to support sustainable social and economic recovery in the region.
  • The EIB funding is made available as part of a package that includes a comprehensive technical assistance programme and a risk-sharing instrument supporting SMEs impacted by the crisis, start-ups, women- and youth-owned businesses.
  • Prime Minister Muhammad Shtayyeh stated that this agreement intersects with the Palestinian government's goals to support and strengthen the private sector, especially SMEs affected by the pandemic.
  • The European Union Representative, Sven Kuhn von Burgsdorff, emphasized that this support demonstrates that Palestine offers viable business opportunities worth investing in, despite the challenges the country faces.

Statistics:

  • The operation is a part of a comprehensive package of economic assistance that the EU allocated to support the Palestinian economy in its recovery from the virus crisis, amounting to around EUR 85 million of EU funds.
  • The total package is expected to mobilize over EUR 400 million in soft loans and investment for the Palestinian private sector.
  • SMEs account for over 95% of local businesses in Palestine, contribute more than 55% to the GDP, and employ 85% of the active working population.
  • The Covid-19 outbreak has led to a decrease in turnover and profitability for many companies, resulting in payment delays and an increased demand for liquidity.

Sources:

  • European Investment Bank (EIB)
  • Palestine Investment Bank (PIB)
  • EU's European Fund for Sustainable Development (EFSD)
  • European Union Representation
  • Palestinian Monetary Authority (PMA)
  • Prime Minister Dr. Muhammad Shtayyeh

Read more