Quds Bank, Proparco and the European Union join efforts to support SME financing and high impact companies in Palestine
published on 26 October 2021
Quds Bank and Proparco (AFD Group) signed the first risk sharing agreement under the EU MENA SME Facility. This operation will support Quds Bank in lending the equivalent of 2 million euros to SMEs with a focus on high impact companies including green SMEs, women-owned businesses and start-ups. This project constitutes the first partnership between Proparco and Quds Bank.
MSMEs represent 99% of Palestinian enterprises, yet the vast majority still struggles to access financing. This difficulty to secure loans has been compounded by the pandemic. Through this MENA risk sharing facility, Proparco and the EU will support Quds Bank lending to MSMEs. An innovative feature of the facility lies in the introduction of a performance bonus triggered by lending to high social and societal impact. The project will thus contribute towards Quds Bank’s efforts to support Palestinian SMEs operating in key segments such as green MSMEs (companies engaged in renewable energy, energy efficiency, sustainable agriculture, etc.), women-owned SMEs and start-ups.
Launched by the AFD Group thanks to EU funding, the MENA SME Facility is a 24 million euros facility aimed at supporting financial inclusion and SME financing in seven Mediterranean countries: Algeria, Egypt, Jordan, Lebanon, Morocco, Palestine and Tunisia. The Facility allows the AFD Group to offer local currency financing solutions and performance bonuses together with technical assistance to unlock credit to high development impact companies.
In the framework of the European Joint Strategy and EU External Investment Plan, the European Union, Member States and European Financial Institutions work together as Team Europe promoting Sustainable Growth, Jobs and Resilience in Palestine. Support to Financial Inclusion and Access to Finance for the SMEs is one of the core components of this effort. The European Union Representative, Sven Kühn von Burgsdorff said: “Through this project with AFD Proparco and Quds Bank, the European Union confirms the extension of its support to Palestinian private sector through innovative financial instruments. This support is most timely as Palestine is going through a difficult period, and it demonstrates that in spite of the many challenges Palestine does offer viable business opportunities worth investing in. Micro Small and Medium Enterprises (MSMEs) are the backbone of the Palestinian economy and play a vital role in creating and safeguarding employment, especially for young people and women. As such, they represent a priority focus for EU cooperation”
“By collaborating with Quds Bank, the AFD Group, as part of Team Europe, contributes to strengthen the Palestinian private sector and play a counter-cyclical role in the context of the pandemic. In doing so, the project promotes local private sector development for segments that are essential in achieving sustainable and inclusive economic growth.” said Sarah Morsi, Regional Director for the Middle-East at Proparco.
Chief Executive Officer of Quds Bank, Salah Hidmi, said that “Quds Bank signed this significant risk sharing agreement in light of the importance it attaches to MSMEs in Palestine and their contribution to the Palestinian national economy, development and support of the youth category in the Palestinian society. Signing this agreement enables Quds Bank to optimize its programs of supporting MSMEs operating in key segments such as green MSMEs and women empowerment”, he added. Mr. Hidmi stressed the importance of such partnership in the context of the impacts of Coronavirus pandemic on the banking sector and running projects as well. He also noted that “Quds Bank provides inclusive financing services, including lending to MSMEs through its business centers located across Palestine”.
Since the start of its operation in Palestine in 2017, Proparco committed 100M€ of financing to support the private sector. By collaborating with Quds Bank, the AFD Group subsidiary contributes to play a counter-cyclical role in the context of the pandemic with the objective of sustaining job creation and economic growth.
About the European Union External Investment Plan (EIP)
The EU’s ambitious External Investment Plan (EIP) has been set up to encourage investment in its partner countries. It is promoting inclusive growth, job creation and sustainable development. The EIP is crowding in private investors, where viable business proposals meet social needs, and where limited public funds can attract private money. Team Europe Initiative consists of the EU, Member States and European finance institutions joining forces to scale up European impact in partner countries. In Palestine, Team Europe has developed an Initiative to support Sustainable Growth, Jobs and Resilience.
About Quds Bank
Established in Palestine in 1995, Quds Bank has been a trusted partner for individuals and businesses in Palestine, helping drive their financial success and personal well-being by offering proficient and reliable banking services.
Over the years, Quds Bank has redefined the essence of banking through its four key pillars: Relationship building, Simplicity, Efficiency and Convenience.
Focused on offering simple and easy-to-understand products, and led by a commitment to long-term relationships with our clients, Quds Bank today has a portfolio that offers a wide range of retail and corporate banking solutions including but not limited to personal account services, home and auto financing, SME’s financing, commercial loans and project support.
The bank runs its’ main operations through its headquarter located in Ramallah, Al Masyoun, in addition to 39 fully-fledged branches and offices across Palestine.
