European-Palestinian Credit Guarantee Fund EPCGF IV

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As part of the planned FC measure, a capital increase of EUR 10.0 million (FC grant) is to be made for the Stichting European Palestinian Credit Guarantee Foundation (EPCGF). Since its establishment, EPCGF has, with the support of KfW and the European Union (EU), provided partial (portfolio) credit guarantees for investment and working capital loans to micro, small and medium-sized enterprises (MSMEs) with fewer than 20 employees, as well as partial credit guarantees for loans from local banks to microfinance institutions (MFIs) in the Palestinian Territories (PG). In the fourth phase, part of the funds (up to EUR 3.0 million) will be used for a special Gaza program, which will be funded by an EU mandate from the Neighbourhood Investment Platform of up to EUR 10.0 million. The aim of this is to encourage lending to MSMEs, particularly in Gaza, and to accept higher loan default rates in return. Including these EUR 3.0 million, a total of EUR 9.4 million will be used to finance the EPCGF products. The remaining EUR 0.6 million will be used to finance a short study and supporting consulting services during implementation.