Palestinian businesses were underserved even before the latest war tore through the territories, devastating businesses, infrastructure and livelihoods. France’s development finance institution Proparco is providing the Bank of Palestine with $20 million in senior debt to offer lines of credit to Palestine’s small businesses.
The loan is part of a $65 million financing agreement with the International Finance Corp. and SANAD Fund for MSMEs, an impact fund backing Middle Eastern and North African enterprises.
Economic lifeline
Palestine’s small businesses are the economy’s lifeline, employing over 85% of the working population and contributing more than half of its GDP. The vast majority are family-owned. The ongoing war with Israel has throttled the economy, which continues to shrink.
The consortium’s financing equips the Bank of Palestine “with liquidity and the long-term ability to provide needed financing for a vital economic sector,” said the bank’s Hashim Shawa. Healthy small businesses, he added, “enable the real economy to revive, recover and grow.”
Renewed support
Proparco has invested in the Bank of Palestine since 2021, when it made a $12 million equity investment. It teamed up with the bank again in 2022 on a green financing facility to help local Palestinian banks make loans for renewable energy and energy efficiency projects.
Last year, Proparco, alongside the European Union, provided the Palestinian bank with its fifth portfolio guarantee facility of $9.2 million. The financing came from its ARIZ vehicle that provides guarantees on loans to small businesses and microfinance institutions.
