The Arab Center for Agricultural Development (ACAD), the European Investment Bank (EIB), Solidarité Internationale pour le Développement et l’Investissement (SIDI), Grameen Crédit Agricole Microfinance Foundation and Triple Jump signed an equity agreement today for a total amount of USD 5.3 million*. The financial contract was signed in Ramallah, under the auspices of the Governor of the Palestine Monetary Authority, by EIB Vice-President Philippe de Fontaine Vive, Hasib Nashashibi, Chairman of the Board of ACAD, Christian Schmitz, Chief Executive Officer of SIDI, Jürgen Hammer, Chief Investment Officer at Grameen Crédit Agricole Microfinance Foundation and Eelco Mol, Fund Manager at Triple Jump.
This project is focused on sustainable development in rural areas with the aim of reducing imbalances, supporting small and micro-entrepreneurs throughout the Palestinian Territory – in particular women and farmers - and creating sustainable jobs. It will make the financial sector more accessible to the Palestinian people while supporting the process for transforming ACAD into a sustainable financial institution, ACAD Finance, which will be regulated by the Palestine Monetary Authority under the Banks Law No. 9 of 2010.
The EIB’s financial contribution of USD 1 million – which represents 18% of the company’s capital - will be combined with a technical assistance operation and will contribute to the EU’s microfinance objectives and priorities in the Mediterranean partnership countries. The EIB’s commitment is financed by the European Union via the European Neighbourhood Partnership Instrument (ENPI).
EIB Vice-President de Fontaine Vive commented: “The EIB is proud to be making its first financial contribution to support a microfinance institution in Palestine such as ACAD Finance. This project marks a milestone for improving local development in rural areas, especially for women. It provides a strong signal for the future in terms of investment, trade and job opportunities.”
“We are very pleased to be making our first equity investment in the Middle East, particularly in Palestine where the microfinance sector has witnessed important developments with regard to microfinance regulations and social performance despite the challenging environment,” said Mr Mol, Triple Jump’s Seed Capital Fund Manager. “Triple Jump has been lending to microfinance institutions in Palestine since 2009, and with this project we look forward to contributing further to rural development through innovative financial products and services.”
Grameen Credit Agricole’s Chief Investment Officer Jurgen Hammer highlighted how important it was for development activities to target rural areas, which account for an estimated 70% of global poverty. He pointed out that “small-holders, including women, are the largest group among the working poor and helping them to produce and earn more is essential to their welfare. We are confident that our partnership with ACAD, which has demonstrated its capacity to balance a strong social focus with sustainability, will contribute to the empowerment of women and to the fight against poverty and food insecurity in Palestine.”
SIDI’s CEO said: “SIDI is proud to have been supporting ACAD over the last 15 years, especially during the toughest times for microfinance in Palestine, and to have been involved in jointly preparing ACAD for the required stages of its transformation into a sustainable financial company, while maintaining its prospects and outreach throughout the Palestinian territory.”
*Co-investors:
- ACAD-NGO: USD 3m
- European Investment Bank (EIB): USD 1m
- SIDI - Solidarité Internationale pour le Développement et l'Investissement: USD 0.5m
- Grameen Crédit Agricole Foundation: USD 0.5m
- Triple Jump: USD 0.3m
