Provision of an SME loan of up to USD 3.0 million (EUR 2.5 million equivalent) in favor of Vitas Palestine for Microfinance Company (Vitas Palestine), a for-profit microfinance institution incorporated in the West Bank.
The credit line will be used by Vitas Palestine to on-lend to MSMEs operating in all sectors in the West Bank.
ETI score: 60
The loan will contribute to the continued functioning of the Palestinian economy by on-lending to MSMEs. The goal of this operation is to ensure the resilience of the financial sector and preserve competition in the sector. More specifically, it will help Vitas Palestine remain operational (Resilient) and continue commercial lending in line with the market and comparable players (Competitive).
VITAS PALESTINE FOR MICROFINANCE COMPANY
Vitas Palestine for Microfinance Company (the "Company" or "Vitas Palestine") was established in its current form in 2013 in Ramallah, West Bank. In 2015, the Company obtained its license as a private specialized lending company from the Palestine Monetary Authority ("PMA") and is regulated by it. Currently, the Company operates in both the West Bank and Gaza through 10 branches (of which seven are in the West Bank and three are in Gaza), and employs 120 people and has a total lending portfolio of around USD 49.0 million.
EBRD Finance Summary
Total Project Cost
Provision of medium-term financing and capacity building technical assistance as well as supporting the client with adopting gender standards and an equal opportunities' action plan.
Environmental and Social Summary
Categorised FI (ESP 2019): Vitas Palestine for Microfinance Company is a new client and will be required to comply with PRs 2, 4 & 9 and implement the EBRD's Environmental & Social Risk Management Procedure for Micro, SME and Corporate Lending. The client has completed the standard E&S due diligence questionnaire and this has been reviewed by ESD. While the risk profile presented by their portfolio is low, there are certain minor aspects of their EHSS risk management structure that will require upgrading to be compliant with the Bank's PRs, and these will be agreed with the client. ESD will support the client in carrying out these changes.
Technical Cooperation and Grant Financing
The project will be accompanied with tailor-made technical cooperation ("TC") program for capacity building for Vitas Palestine. The TC will include: (i) assessing the credit risk as well as conducting a digitalization assessment on Vitas Palestine to provide recommendations on developing the Risk function and the IT back-office to meet international best practices for MFIs, and (ii) assessing the AML/CFT function at Vitas Palestine and develop it further as well as provide targeted trainings on AML/CFT to Vitas's management. EBRD also mobilized funds to cover the costs of the legal due diligence on Vitas Palestine. All technical assistances will be covered from the Multi-Donor Trust Fund for WB&G.
Company Contact Information
+972 2 241 0510
PSD last updated
15 Sep 2021
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Independent Project Accountability Mechanism (IPAM)
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