📋 Tender Overview
Location: West Bank and Gaza
Project number: 55443
Business sector: Financial institutions
Notice type: Private
Environmental category: FI
EBRD Finance Summary: USD 5,000,000
Total Project Cost: USD 5,000,000.00
Project Description
Provision of a senior MSME loan of up to USD 5.0 million (EUR 4.7 million) in favor of Vitas Palestine for Microfinance Company ("Vitas" or "Vitas Palestine"), a for-profit microfinance institution incorporated in the West Bank. 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 Vitas for on-lending to eligible local MSMEs based in the West Bank.
The loan is likely to be accompanied by a 20% first-loss risk cover (FLRC) in the amount of USD 1.0 million (EUR 0.94 million) funded by the European Union through the SEMED Financial Inclusion Program. The FLRC will be in the form of a partial portfolio guarantee in favor of Vitas in order to support lending to MSMEs in the current challenging operating environment.
Project Objectives
The operation will enable Vitas Palestine to scale up lending to MSMEs in the West Bank particularly in response to the increased financing needs faced by MSMEs in the wake of the October 7th, 2023, events, which had severe negative impacts on the economic activity in the West Bank in general, and on MSMEs in particular.
Transition Impact
ETI score: 68
As the second largest MFI in WB&G, Vitas is a key partner to deploy support to local private MSMEs in the West Bank, and particularly the most underserved segments amongst MSMEs. Vitas' continuous focus on underserved segments in the economy including women, and areas outside of the main urban centre of Ramallah will 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.
