📋 Tender Overview
Location: West Bank and Gaza
Project number: 55190
Business sector: Financial institutions
Notice type: Private
Total Project Cost: USD 5,000,000.00
Project Description
Provision of a senior MSME loan of up to USD 5.0 million (EUR 4.6 million) in favor of Palestine for Credit and Development (FATEN), a non-profit microfinance institution incorporated in the West Bank and Gaza in 1999. The MSME loan will be structured in two equal tranches (USD 2.5m committed tranche and USD 2.5m uncommitted tranche) and will be utilised by FATEN for on-lending to MSMEs based in the West Bank.
The loan will be accompanied by a 20% first-loss risk cover (FLRC) funded by the European Union through its Initiative for Financial Inclusion (Neighbourhood Investment Facility - SEMED Financial Inclusion Program). The FLRC will be provided for the benefit of FATEN's portfolio of MSMEs to encourage FATEN to continue lending to the most underbanked segments of the economy.
Project Objectives
The operation will provide FATEN with uninterrupted supply of finance to be able to support MSMEs in the West Bank particularly following increased financing needs faced by MSMEs in the wake of the Israel-Hamas war, which had severe negative impacts on the economic activity in the West Bank in general, and MSMEs in particular.
Transition Impact
ETI score: 72
As the largest MFI in WB&G, FATEN is a key partner to deploy support to local private MSMEs in the West Bank, and particularly the most underserved segments amongst MSMEs. FATEN's wide reach and continuous focus on underserved segments in the economy including women, youth and areas outside of the main urban centre of Ramallah will also serve to broaden EBRD's scope for financial inclusion in WB&G. Accordingly, the expected transition impact is expected to be derived from the Inclusive and Competitive qualities by focusing on expanding the MSME portfolio and ensuring prudent lending practices, respectively.
