Palestine Monetary Authority’s Governor Holds Press Conference on Sustainability Fund for Financing the Economic Sectors

Ramallah and Al-Bireh Governorate – June 8, 2021 - The Governor of Palestine Monetary Authority, Dr. Feras Milhem, held a press conference, at the headquarters of Palestine Monetary Authority, about Sustainability Fund for Financing the Economic Sectors, which Palestine Monetary Authority had recently announced to be restructure into a permanent fund aimed at providing financing (loans), through commercial and Islamic banks, to various economic sectors, enabling economic projects to recover, increase the production cycle and create jobs in accordance with the general framework and the government's economic directives.

Dr. Milhem said the development of a sustainability program was carried out within criteria that enabled wider segments of society to benefit from it, to contribute to economic development, in light of the economic changes, especially the repercussions of the Coronavirus crisis on all sectors, listening to broad segments of economic and community actors and experts, and consulting with the Council of Ministers. The value of the Sustainability Fund is $435 million, of which Palestine Monetary Authority contributed $210 million in the first phase. The lending period reaches 48 months and has a grace period of 12 months.

Dr. Milhem explained that banks had been instructed to give priority to providing financing to the economic sectors in accordance with six important programs, namely the health sector financing program with the aim of providing the foundations for the preservation of life; the education sector financing program with the aim of ensuring education for all; the digital transformation financing program with the aim of transitioning to the digital economy and integration into the global economy; the microenterprise financing program; the recovery program; the promotion of economic growth and the program of providing financing to specialized lending institutions. Dr. Milhem said that the government had generously provided support with the value of $4 million to mitigate credit risk, especially for microenterprises.

The Governor of Palestine Monetary Authority added that $10 million had been allocated to finance microenterprises, through five banks, with a financing ceiling of $10,000 per enterprise, which meant that more than 1,000 enterprises could benefit from cost-free financing to encourage or help groups of women and entrepreneurs to start their businesses. The Governor noted that this program enabled microenterprises to continue the production cycle and maintain employment opportunities.

The Governor said the target businesses included the development of tourism, agriculture, industry, services, information technology, renewable energy, retail sales and other businesses that contributed to strengthening the production cycle and job creation, developing new businesses, especially those led by young people, entrepreneurs and experts, and promoting new partnerships and production chains.

The Governor also noted that the recovery and economic growth promotion program included financing for small businesses with a ceiling of $50,000, medium businesses with a ceiling of $150,000, and other businesses with a ceiling of $300,000. There is no financing ceiling for health, education and digital transformation projects, according to Dr. Milhem.

The governor also stated that Palestine Monetary Authority is currently working on financing programs for the Jerusalem governorate and the southern governorates (Gaza Strip) that were commensurate with the need of the beneficiary entrepreneurs and enhanced the opportunities for the provision of financing for housing purposes, which would be announced in the near future.

The Governor of Palestine Monetary Authority held a Q&A session at the end of the press conference.