Microfinance targets owners of productive projects in order to finance working capital and fixed assets. Microfinance is offered to the owners of productive projects in stages whereby the value of the loan rises, the payment period increases and interest rate decreases. Moreover, Bank of Palestine offers consumer loans and other loans for the purpose of improving the housing of owners of productive projects based on their ability to pay the installments from cash flows for the projects, provided that there is no synchronization of any two types of three loan products already mentioned.

Target Customers

This loan service targets the owners of productive projects who are most often non-bankers (who are not eligible to obtain ordinary bank loans or need facilitated loan terms and speed in handling the loan application).

Eligibility Criteria

  • Project has been in place for at least one year.
  • Project must achieve cash surplus adequate to pay the installments.
  • Project site must be located within the areas where the bank operates.
  • Surety of at least one guarantor or a car or gold mortgage. The guarantor may have his salary transferred to the bank or have account transactions with the bank. In addition, the guarantor may have a salary and account transactions at another bank while receiving cheque for the amount o the loan and having the interest within to his account at the other bank.
  • Guarantees for the improvement of housing loans are the same up to USD 5000 but require a second guarantor when the volume of the loan rises from USD 5000 to USD 10,000, and a third guarantor when the volume of the loan rises from USD 10,000 to USD 15,000.

Features of Microfinance

  • Quick handling of loan application.
  • Facilitated lending terms.
  • Individuals illegible for receiving ordinary bank loans can utilize this service.

Commission and Interest Incurred on Microfinance

The following tables show the project loans.

Credit History

Amount USD

Working Capital

Fixed Assets

Fixed Monthly Interest

Allowance Period

Commission

None

Less than 1,000

6-12 months

12-18 months

1.5

None

1% in advance

 

1,000-5,000

6-12 months

12-18 months

1.2

None

1% in advance

 

6 months

1,000-6,500

6-12 months

12-24 months

1.0

None

1% in advance

 

12 months

1,000-8,000

6-12 months

12-36 months

0.7

None

1% in advance

 

24 months

1,000-10,000

6-12 months

12-36 months

0.7

None

1% in advance

 

30 months

1,000-12,500

6-12 months

12-36 months

0.7

None

1% in advance

 

26 months & over

1,000-15,000

6-12 months

12-36 months

0.7

None

1% in advance

 

 

2. Addition of new products to microfinance:

1. The following table shows the policy for housing loans.

Amount USD

Minimum Period

Maximum Period

Fixed Monthly Interest

Allowance Period

Commission

1,000-5,000

12 months

36 months

1.2%

None

1% in advance

5,001-10,000

12 months

42 months

1.2%

None

1% in advance

10,001-15,000

12 months

48 months

1.2%

None

1% in advance

2. The following table shows the policy for personal loans:

Loan

Amount Limit USD

Maximum Period

Monthly Interest

Allowance Period

Commission

Personal

3,000

18 months

1.2%

None

1% in advance