FIF - FATEN SME Credit Line II (EBRD-55190)

Countries
  • Palestine, West Bank, Gaza
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • European Bank for Reconstruction and Development (EBRD)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
U
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Jun 25, 2024
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
PALESTINIAN COMPANY FOR CREDIT AND DEVELOPMENT (FATEN)
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Project Cost (USD)
$ 5.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Currency conversion note:
Bank reported
Converted using 2024-06-25 exchange rate.
Bank Documents
Primary Source

Original disclosure @ EBRD website

Updated in EWS Jul 19, 2024

Disclosed by Bank May 22, 2024

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the Bank’s website, the project consists of the provision of a senior MSME loan of up to USD 5.0 million (EUR 4.6 million) in favor of Palestine for Credit and Development (FATEN), a non-profit microfinance institution incorporated in the West Bank and Gaza in 1999. 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 FATEN for on-lending to MSMEs based in the West Bank.

The loan will be accompanied by a 20% first-loss risk cover (FLRC) funded by the European Union through its Initiative for Financial Inclusion (Neighbourhood Investment Facility - SEMED Financial Inclusion Program). The FLRC will be provided for the benefit of FATEN's portfolio of MSMEs to encourage FATEN to continue lending to the most underbanked segments of the economy.

The operation will provide FATEN with uninterrupted supply of finance to be able to support MSMEs in the West Bank particularly following increased financing needs faced by MSMEs in the wake of the Israel-Hamas war, which had severe negative impacts on the economic activity in the West Bank in general, and MSMEs in particular.

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

Categorised FI (ESP2019).

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

A senior MSME loan of up to USD 5.0 million (EUR 4.6 million). The MSME loan will be structured in two equal tranches (USD 2.5m committed tranche and USD 2.5m uncommitted tranche).

The loan will be accompanied by a 20% first-loss risk cover (FLRC) funded by the European Union through its Initiative for Financial Inclusion (Neighbourhood Investment Facility - SEMED Financial Inclusion Program). 

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

Palestine for Credit and Development (FATEN) was established in its current form in 1999 as a private non-profit company. In 2014, FATEN was licensed by the Palestine Monetary Authority (PMA) and is currently operating under its supervision. FATEN is the largest microfinance institution in the WB&G with a market share of 51% in terms of loans as of end of 2023. FATEN operates through 34 branches in the WB&G, covering over 26,600 borrowers.


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

COMPANY CONTACT INFORMATION

Lubna Aboudi
lubna.aboudi@faten.org
+970 2 296 1471
Al-Tireh, P.O Box 2446, Ramallah, West Bank & Gaza

ACCESS TO INFORMATION

You can request information by emailing: accessinfo@ebrd.com or by using this electronic form: https://www.ebrd.com/eform/information-request

ACCOUNTABILITY MECHANISM OF EBRD

The Project Complaint Mechanism (PCM) is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an European Bank for Reconstruction and Development (EBRD)-financed project. If you submit a complaint to the PCM, it may assess compliance with EBRD's own policies and procedures to prevent harm to the environment or communities or it may assist you in resolving the problem that led to the complaint through a dialogue with those implementing the project. Additionally, the PCM has the authority to recommend a project be suspended in the event that harm is imminent.

You can contact the PCM at: pcm@ebrd.com or you can submit a complaint online using an online form at: http://www.ebrd.com/eform/pcm/complaint_form?language=en

You can learn more about the PCM and how to file a complaint at: http://www.ebrd.com/work-with-us/project-finance/project-complaint-mechanism.html

How it works

How it works