National Bank and Monetary Authority Sign Framework Agreement for $50 Million Financing in Support of Small, Medium, and Micro Enterprises in Palestine

SadaNews - The Palestinian Monetary Authority and the National Bank have signed a framework agreement worth $50 million; enabling the latter to re-lend these amounts to small, medium, and micro enterprises in Palestine. This is part of a financing package worth €400 million funded by the European Union and implemented by the European Investment Bank through the Palestinian Monetary Authority and partner banks, aimed at supporting these companies and enhancing their access to financing, thereby helping to boost the Palestinian national economy.

The financing framework also includes the provision of the remaining technical assistance valued at €2.1 million within a total technical support program of €3.5 million, aimed at strengthening the supportive environment for micro, small, and medium enterprises, and supporting related financial institutions and sectoral initiatives.

In this regard, Muhammad Manasra, Deputy Governor of the Palestinian Monetary Authority, stated: "Implementing the package of facilities valued at $395 million is a tangible step in enhancing the ability of the Palestinian financial sector to support companies during this period of exceptional pressures. With the help of five sub-loans granted to local banks—part of which is structured as subordinated debts to bolster banks' capital bases—while maintaining the exclusive use of revenues for financing micro, small, and medium enterprises, this cooperation will enhance opportunities for companies to access financing across Palestine, enabling them to continue their activities, adapt to challenging conditions, and sustain economic activity. The Monetary Authority values its partnership with the European Investment Bank and local financial institutions, which contributes to directing this support where it can make a real difference for companies, households, and local communities."

In this context, Gelsomina Fleotti, Vice President of the European Investment Bank, stated: "Palestinian companies need reliable sources of financing to continue their operations and investment activities and maintain livelihoods amid extremely difficult conditions." She added: "In light of these agreements, we are starting to implement the €400 million facilities announced in October 2025, where we are providing up to $395 million through partner local banks to support micro, small, and medium Palestinian enterprises in areas facing urgent financing needs. At the same time, the technical assistance of €3.5 million will contribute to strengthening this sector on multiple levels."

For his part, Michael Carneitsching, Acting Director-General of the Directorate-General for the Middle East and North Africa and the Gulf, mentioned: "The implementation of the €400 million facilities from the European Union to Palestine has begun to achieve its desired goals. By directing $395 million to Palestinian companies through local banks and offering technical assistance amounting to €2.1 million, we provide these companies with vital financial resources directly. This is not just an investment in companies; it is an investment aimed at creating job opportunities, enhancing resilience, and achieving a promising future for Palestinians."

Nimer Abdul Wahid, Vice Chairman of the National Bank's Board of Directors, emphasized the importance of the agreement, noting that it opens new horizons for small and medium-sized enterprises, providing them with flexible financing tools that enhance their growth opportunities and allow access to resources that were previously unavailable.

He affirmed that this direction contributes to integrating sectors and areas that have long suffered from weak financial services, creating a more inclusive environment and enhancing these companies' ability to withstand and provide job opportunities that contribute to stimulating the national economy.

Abdul Wahid added that this support gains multiplied value amid the current political and economic challenges, as it helps stimulate trade activity and enhances the Palestinian economy's ability to recover and rise again.

It is worth noting that the collaboration between the National Bank and the European Investment Bank in supporting small and medium enterprises is not new; the two parties previously launched a $50 million recovery financing program for these companies due to the repercussions of the Corona pandemic, and cooperation continued later through loan guarantee instruments.