The European Investment Bank (EIB) has launched a new initiative, in partnership with the Palestine Investment Bank (PIB), to facilitate €19 million ($22 million) in financing to bolster Palestinian businesses. The move aims to strengthen targeted business financing, promoting economic growth and job creation in the region.
Under the agreement, signed in Ramallah, the initiative will specifically support small businesses and entrepreneurs who face difficulties accessing capital due to a lack of collateral. The initiative is designed to augment business finance accessibility in various currencies.
The financing scheme, backed by the European Union, complements a previously agreed $20 million EIB credit line provided through the PIB in 2021. This credit line was aimed at supporting Palestinian small and medium-sized enterprises (SMEs) most affected by the Covid-19 pandemic.
The landmark agreement with the PIB is EIB’s first-ever portfolio guarantee business financing cooperation in Palestine. Gelsomina Vigliotti, Vice President of EIB, and Abed Dayeh, Chairman of the Board of Directors of the PIB, formalized the agreement in Ramallah.
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Abed Dayeh stated that the PIB is committed to enhancing investments by Palestinian businesses. He praised the timely support from the EIB and the European Union, saying it will bridge investment gaps and bolster resilience to global economic, inflation, and energy shocks as well as local challenges.
Gelsomina Vigliotti added that the EIB supports impactful business investment initiatives, working closely with top local financing partners around the globe. The latest financing cooperation with the PIB will facilitate €19 million loans, supporting Palestinian companies across key sectors, and allowing smaller local businesses to scale, create jobs, and invest in skill development.
EU Representative Sven Kühn von Burgsdorff underlined the need to enhance economic resilience and improve access to business finance in Palestine, saying the financing scheme will stimulate much-needed private sector investment, contributing to greater economic self-reliance, prosperity, and welfare in Palestine.
The initiative involves the EIB providing a guarantee to business loans given by the PIB. It is supported by the European Union’s European Fund for Sustainable Development, through the SME Access to Finance Initiative. Over the past 28 years, the EIB has supported more than €490 million of new investment by thousands of Palestinian businesses.
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