The Palestine Monetary Authority (PMA) and the European Bank for Reconstruction and Development (EBRD) to strengthen financial sector in West Bank and Gaza

Strengthening the Palestinian banking sector by providing skills transfer and know-how exchange -the Palestine Monetary Authority (PMA) and the European Bank for Reconstruction and Development (EBRD) held their first joint workshop in Ramallah in the West Bank.

The workshop focused on highlighting the banking products needed to support the development of small and medium-sized enterprises (SMEs) in the West Bank and Gaza and achieve the objectives and requirements of financial inclusion.

The event was  opened byAzzam Shawwa, Governor of the Palestine Monetary Authority (PMA), and EBRD’s First Vice President, Phil Bennett who both expressed the importance of coordinating this workshop in order to discuss ways to enhance the Palestinian banking sector and offer new products to SMEs to enable them to grow further.

The workshop was an important first concrete result of the newly-established activities of the EBRD in the Palestinian territories, they said.

PMA Governor Shawwa, thanking the EBRD’s Board of Governors for their decision on EBRD investment, said, “The Bank’s investment in the Palestinian economy will be reflected positively in an increase in financing for small and medium-sized enterprises and will encourage the private sector.”

Micro, small and medium sized enterprises play a crucial role in the domestic economy, representing about 95% of economic output. 

The Governor said the PMA was working to overcome obstacles to access to funding sources by granting incentives to banks and other lenders to increase the scale of lending.

The credit portfolio in this sector had risen by 160 per cent between 2013 and the first quarter of 2017 to around $USD 1.3 billion.

The Governor said growth in the SME sector would contribute to increase the penetration rate to financial resources in Palestine, which is currently 36%, also the PMA and partner institutions aim to raise it up to 50% at least by 2025.

EBRD First Vice President Bennett said: “We are very pleased to host this first event with the Palestinian authorities to exchange views and knowledge with the business community.

We are looking forward to develop our activities in the West Bank and Gaza and we aim to accelerate access to finance for SMEs which are the backbone of the local economy and a source of much needed employment.”

The workshop included a panel discussion which highlighted EBRD’s financial products such as credit lines, the trade finance program equity as well as business advisory services for SMEs. It also included some of EBRD’s clients in Jordan who shared their experience working with EBRD in the banking and SME sectors. 

In addition, Heike Harmgart, EBRD Head of Jordan, West Bank and Gaza, highlighted the Bank’s successful experience working in Jordan in the last five years and the importance of providing SMEs with improved access to finance.

The EBRD Board of Governors approved the engagement of EBRD in the West Bank and Gaza to support the development of the economy with investments through a trust fund at the Bank’s 2017 Annual Meeting in Cyprus in May.

The West Bank and Gaza are in the EBRD’s southern and eastern Mediterranean (SEMED) region, which also includes Egypt, Jordan, Morocco and Tunisia, where the EBRD has been investing since 2012 and engaged in policy dialogue. To date, the Bank has provided some €5.2 billion to these four countries alone in the form of loans and equity. 71 per cent of these investments are in the private sector.