2 JULY 2021: The European Bank for Reconstruction and Development (EBRD) is strengthening micro, small and medium-sized enterprises (MSMEs) and promoting international trade in the West Bank and Gaza with a $10 million financial package to Quds Bank.
MSMEs are at the core of the Palestinian economy, representing more than 98 per cent of the local market. Exacerbated by the coronavirus pandemic, insufficient access to funding remains a constraint on the growth of many small businesses.
The package includes a credit line of up to $5 million for MSMEs and corporates, providing them with vital liquidity to help mitigate the impact of the Covid-19 pandemic. This credit line will help Quds Bank provide short-term loans to businesses facing liquidity constraints due to a decrease in their activities and turnover.
Additionally, the EBRD will continue to support exporters and importers in the West Bank and Gaza by providing a US $5 million increase in Quds Bank’s existing trade finance limit under the EBRD’s Trade Facilitation Programme (TFP). The financing will help Quds Bank to diversify its trade finance business, increase available limits and offer longer maturities to its customers.
The EBRD funding will help many small Palestinian-owned businesses suffering from the vice like grip of Israeli occupation, on the one hand, and the devastating effects of the global coronavirus pandemic, on the other. MSMEs are at the core of the Palestinian economy, representing more than 98 per cent of the local market.
Exacerbated by the global coronavirus pandemic, insufficient access to funding remains a constraint on the growth of many small businesses.Launched in 1999, the TFP aims to promote foreign trade to, from and among the economies in which the EBRD invests. Through the programme, the Bank provides guarantees to international confirming banks and short-term loans to selected banks and factoring companies for on-lending to local exporters, importers and distributors.
Last year, the programme supported the financing of foreign trade totalling more than €3.3 billion – a record annual volume. This funding was largely in response to the devastating effects of the pandemic on Palestinians living under illegal Israeli occupation, through the facilitation of more than 80 transactions involving trade in medicines, medical supplies, medical equipment and personal protection products for a total volume of almost €60 million.
Alain Pilloux, EBRD Vice-President, Banking, said: “We are very happy to partner for the second time with Quds Bank to support small businesses, which represent a substantial segment of the local economy. Promoting these enterprises and trade activities will contribute to the creation of more jobs as well as the development of the private sector in the West Bank and Gaza.”
Akram Jerab, Chairman of Quds Bank, said: “We are delighted to have this second major agreement with the EBRD. This continuous cooperation emphasises the commitment of both Quds Bank and the EBRD to supporting the Palestinian economy by means of business and trade financing. We appreciate the bank’s support of our staff through generous capacity-building and training programmes, made available via world-class specialised training institutions.”
A technical assistance programme, financed by the EBRD’s West Bank and Gaza trust fund, will help Quds Bank to strengthen its capacity in lending policies and procedures and to introduce new MSME lending techniques and products.
Quds Bank is the third-largest commercial bank in the West Bank and Gaza and has been listed on the Palestine Exchange since 1997.
Since the start of its operations in the West Bank and Gaza in 2017, the EBRD has signed 12 transactions for a total of US$ 51 million.