IFC, PROPARCO & SANAD Fund for MSME Sign a USD 65 million financing agreements
with Bank of Palestine in support of SME businesses in anticipation of economic recovery
BBank of Palestine signed today a USD 65 million financing agreement with a consortium comprised of the International Finance Corporation (IFC), PROPARCO, the Investment Arm of the French Development Agency, and SANAD Fund for MSME’s, in support of the Bank’s programs to support economic recovery in Palestine with a focus on small and medium enterprises (SMEs).
The agreement comes at a time the Palestinian economy is in recession due to the war on Gaza. Hardest hit by these economic challenges is the SME sector requiring additional liquidity and financing from the Bank. SMEs represent 90% of economic activity in Palestine and as such constitute the backbone of the Palestinian economy. As such three leading Global Development Finance Institutions came together; with the IFC contributing USD 35 million (USD 25 million from IFC’s own account - plus blended finance which includes a USD 6.5 million loan from IFC’s Global Small and Medium Enterprises Finance Facility and a USD 3.5 million loan from IFC’s MENA Private Sector Development Program), PROPARCO USD 20 million and SANAD USD 10 million to provide additional liquidity for financing SMEs during the recovery phase of the Palestinian economy.
Françoise Lombard, CEO of Proparco, said: “As a long-time partner of Bank of Palestine, Proparco is proud to stand once more by the Bank in these challenging times. We are confident that this credit line will achieve its ambitious yet crucial objective of helping Palestinian SMEs to withstand the current downturn and play a significant part in the coming economic recovery.”
SANAD's involvement continues to tangibly demonstrate its long-term dedication to empowering SMEs and promoting inclusive financial landscapes in the MENA region. “Supporting SMEs is vital for economic stability and growth, especially in challenging times,” said SANAD Board Chairperson Dr. Daniela Beckmann. “The SANAD Fund's contribution underscores our commitment to fostering inclusive financial ecosystems and empowering small businesses in Palestine. We believe this partnership will help to drive significant, positive change and aid in the region's economic recovery.”
HHashim Shawa, Chairman of Bank of Palestine said: “Bank of Palestine has championed the financing of the SME sector and remains committed to the well-being of this sector and its clients. The financing credit line by the international consortium of IFC, PROPARCO and SANAD is an important financing tool equipping the bank with liquidity and the long-term ability to provide needed financing for a vital economic sector. The health of this sector would enable the real economy to revive, recover and grow. We are thankful for this partnership with the DFIs that came together and in record time mobilized this financing tool at a very critical period facing the Palestinian economy.”