The European Investment Bank (EIB) and The National Bank (TNB) signed a line of credit agreement of $50 million to support the resilience of the Palestinian private sector to be on-lent primarily to local small and medium-sized enterprises (SMEs).
This is the EU Bank's first operation in response to the Covid-19 related emergency in Palestine, and it is part of the Team Europe Initiative to help mitigate the economic consequences of the coronavirus pandemic, the EIB said in a statement.
The EIB financing comes under the Economic Resilience Initiative (ERI), which is part of the European Union's response to the challenges in the Southern Neighbourhood, such as forced displacement and migration, economic downturns and political crises.
The EIB funding is made available as part of a package, including a comprehensive technical assistance program and a risk sharing instrument on a later stage, to be provided under the EU's European Fund for Sustainable Development (EFSD).
These instruments aim to promote access to finance for SMEs in general and financial inclusion of underserved and vulnerable groups of the economy, including SMEs impacted by Covid-19 crisis, start-ups, women- and youth-owned businesses, the statement said.
"We are proud to partner with The National Bank. A partnership through which we aim to make available vital and much-needed financing for businesses and, ultimately, sustain jobs and strengthen the resilience of the economy in the midst of the current crisis," Dario Scannapieco, EIB Vice-President said during the signing of the new financing agreement.
Meanwhile, TNB Chairman, Talal Nasereddin, said the bank is very proud to be the first bank in Palestine to gain the trust of the EU and the EIB and sign an agreement which supports our strategy and approaches for expanding our financing to this vital sector, especially being the most affected due to the coronavirus pandemic.
"With this credit line, we will certainly contribute towards reinforcing the resilience of the SMEs in Palestine and the Palestinian national economy, which SMEs is considered its backbone," he noted.
The National Bank (TNB) is the second largest Palestinian bank and the fastest growing in the country. TNB is one of the country's most trusted providers of comprehensive financial services for the corporate, retail, investment and MSME sectors.