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    Reference: 20210808
    Release date: 3 July 2023

    Promoter – Financial Intermediary




    The operation consists in a guarantee facility to the Palestine Investment Bank covering a loan portfolio to small and medium-sized enterprises (SMEs).

    Additionality and Impact

    The proposed partial portfolio guarantee to Palestine Investment Bank is intended to improve access to finance for SMEs in Palestine.

    SMEs are the backbone of the Palestinian economy as they account for over 95% of local businesses, contribute to more than 55% of the GDP, and employ 85% of the active working population. Limited access to financial services from formal financial intermediaries represents one of the main challenges for SMEs, a problem that limits their contribution to economic growth and employment. Moreover the segment has been severely hit by the consequences of the COVID-19 pandemic.

    The operation will address the market failures that hinder credit to Palestinian SMEs, such as information asymmetries and capacity constraints. The conditions of the loans are prohibitive, particularly in terms of collateral requirements and pricing. Furthermore, SMEs are underserved because financial intermediaries do not internalize the positive social externalities of financing (e.g. support to local employment). The guarantee will mitigate the credit risk borne by Palestine Investment Bank, enabling it to lend to SMEs with reduced collateral requirements and/or lower pricing. 

    The operation is strongly aligned with external EU policies, such as the flagship initiative for Palestine promoting private sector-led growth and job creation. The operation would also contribute to the strategic orientations of the European Fund for Sustainable Development Plus (EFSD+) under NDICI Global Europe, the EU-Palestine Action Plan and the Palestine National Policy Agenda.


    The primary objective is to enhance access to loan finance for Palestinian SMEs through improved terms and conditions, especially reduced collateral requirements and/or lower financing costs. Consequently, the operation contributes to economic resilience and employment generating activities.


    Proposed EIB finance (Approximate amount)

    EUR 3 million

    Total cost (Approximate amount)

    EUR 26 million

    Environmental aspects

    The EIB will require that implementation of the project will be done in line with the principles of EU environmental legislation and EIB Environmental and Social Standards.


    The EIB will require that implementation of the project will be done in accordance with the EIB's Guide to Procurement.


    Signed - 22/06/2023

    Under appraisal
    20 December 2022
    22 June 2023


    Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The information and data provided on this page are therefore indicative.
    They are provided for transparency purposes only and cannot be considered to represent official EIB policy (see also the Explanatory notes).

    Related tags

    Palestine* Credit lines