The European Investment Bank (EIB) has signed a financing contract of $3.3 million with Vitas Palestine to finance microentrepreneurs in the West Bank and Gaza. The EIB financing forms part of Team Europe’s response to the COVID-19 pandemic. This new financing would help support about 1 237 microentrepreneurs, of whom 30% are women.
The new financing is a top-up of the $5 million financing agreement signed in December 2017 to support the Palestinian microfinance sector. It aims at improving the resilience of the microfinance sector to deal with the economic impact of the COVID-19 pandemic.
Werner Hoyer, the EIB President, said: “Small and medium companies account for 95% of the Palestinian economy and play a vital role in creating and safeguarding employment, especially for young people and women. This comprehensive package will enhance access to much-needed financial support for the Palestinian private sector in the midst of the current, unprecedented crisis. As the EU bank and a key contributor to Team Europe, we value our partnership with local intermediaries who will implement the schemes with us.”
Mr Alaa Sisalem, CEO of Vitas Palestine added, “Vitas Palestine cherishes this ongoing relationship with the EIB through which we will be able to fulfil our clients’ needs during this difficult pandemic situation and we wish to thank the EIB for their continuing support to the microfinance sector in general and to Vitas Palestine given the role that we play, especially in developing an enabling economic environment for entrepreneurs and focusing on women’s empowerment.”
The European Union Representative Sven Kühn von Burgsdorff said: “Six months after the first meeting of the EU-Palestine Investment Platform, I am very pleased to witness today a historic signature ceremony dedicating support to the Palestinian private sector with an unprecedented amount of finance via innovative instruments. This support comes during a period when Palestine is going through a difficult time and it demonstrates that in spite of the many challenges it faces, Palestine does offer viable business opportunities worth investing in. This package of financing will contribute to strengthening the Palestinian economy, contributing to economic independence, prosperity and welfare.”
The financing contract was signed under the Southern Neighbourhood Microfinance Facility (SNMF) —a €71.3 million lending facility which supports investments in microfinance markets in Southern Neighbourhood countries. The facility blends the EIB’s own resources with European Commission resources under the Neighbourhood Investment Facility.
Background information
The European Investment Bank (EIB) is one of the leading development finance players in the Mediterranean region. The Bank’s goal is to support economic and social development by improving people’s living conditions. The EIB aims to establish a tangible presence in partner countries, focusing on the economic and social priorities of the beneficiary countries to which it not only contributes its financing capacity but also adds value in terms of project implementation and modernisation of public policies through its technical and financial expertise and advisory services.
The Risk Capital Facility for the Southern Neighbourhood provides access to equity and debt financing to MSMEs in the Mediterranean region in order to support private sector development, inclusive growth and private-sector job creation. It was established by the European Commission and the EIB, and builds on the success of the ENPI-FEMIP Risk Capital mandate for 2007-2013, which was fully deployed despite the unprecedented geopolitical turmoil in the target region. https://www.eib.org/en/products/blending/rcfsn/index.htm