- New loans to existing clients at the participating partner bank who have currently no outstanding loan.
- New loans to new clients at the bank.
- New loans to current clients in arrears if the following conditions are met: (i) the “old” loan is rescheduled or restructured; and (ii) the cash flow of the project as a whole (old and new loan) enables business to repay. Only the new loan is eligible for the guarantee.
Bank borrowing requirements to be met including clearance form the Credit Information Bureau of the Palestine Monetary Authority (PMA).
Loan maturities are for more than one year and up to five years with a maximum amount of USD 100,000.00 or its equivalent. Loans under the guarantee programme are limited to once every two years.
Loans are available to finance:
1- Working capital (raw materials, inventory, receivables, etc)
Working capital loans may be repaid over a period of three years with 6 months grace period.
2 - Capital investments (fixed assets, equipment and machinery, refurbishments, etc)
Capital Investment loans may be re paid over a period of 5 years with 12 months grace period.
Privately-owned viable SMEs with 20 employees or less which can meet prudent credit evaluation and criteria set by EPCGF. Those business must be able to :
1- Generate sufficient cash flow to sustain operation and repayment of the loan.
2- Lack or unable to provide the bank with sufficient collateral.
Start-up operations are not covered under the programme. Credit worthy SMEs who have been in operation for a minimum of 2 years are eligible
The Credit Guarantee Fund currently stands at EUR 29 million. EPCGF makes available partial credit guarantees to participating partner banks to cover an agreed percentage of the commercial risk associated with lending to credit worthy SMEs who are unable to furnish the bank with the required collateral.
With the existence of the Credit Guarantee scheme in Palestine, credit worthy SMEs who are unable to furnish banks with required collateral, will be able to have access to the necessary financing.
As the needs and demands grow, EPCGF is committed to find additional capital through existing and new sources.
Recently in 2010, as part of continues development and to meet the needs of SME’s in Palestine. A new product was launched by EPCGF. The Trade Finance line is an excellent financing mechanism for SMEs which will facilitate financing of raw materials and purchases from suppliers on a revolving basis for a period of one year. It is a sound credit product which aims at serving customer’s needs while keeping the bank in control of the relationship thus minimizing credit risk.
- One-year working capital loans.
- Existing loans (i.e., “old” debt).
- Regular overdrafts.