The bank will extend credit in the scope of approximately NIS 50 million a year for three years – more than triple the total credit extended today.

 Mercantile Discount Bank to provide entrepreneurship credit for immigrants and returning residents

 

(Communicated by the Ministry of Finance)

The Inter-Ministerial Tender Committee of the Ministry of Immigrant Absorption and the Ministry of Finance – Accountant General’s Division today chose the Mercantile Discount Bank as the winner of the tender for the establishment and operation of a fund that will extend credit to local businesses owned by new immigrants and returning residents.

Up to now, the State of Israel has operated a fund for this purpose in the sum of NIS 15 million per year, which was financed in full out of the state budget, without commercial banks participating in the loan financing process. The supply of loans in the fund did not meet the demand on the part of new immigrants and returning residents. For the first time ever, as part of this tender, the winning bank will leverage state monies and will finance the lion’s share of the fund, thereby increasing its scope significantly to NIS 50 million a year and increasing the credit allotted for this purpose.

In its bid, Mercantile Discount Bank undertook to leverage the state deposit monies – NIS 10 million – fivefold, which means that the bank will offer loans in the sum of NIS 50 million a year. The bank also pledged that the interest on loans to new immigrants would not exceed prime interest plus a margin of 1.75%.

Senior Deputy Accountant General and Chairman of the Inter-Ministerial Tenders Committee Mr. Yair Tal, welcomed the results of the tender and noted that in addition to significantly increasing the supply of credit to businesses owned by new immigrants and returning residents, having the bank serve as a financing body in the framework of the fund will lead to the efficient utilization of the resources that the State provides in order to help finance businesses. He also noted that this step would promote entrepreneurship and the establishment of businesses by new immigrants and returning residents, and would provide a solution to the unique difficulties of this population sector.

Mr. Dmitry Apartsev, Director General of the Ministry of Immigrant Absorption, noted that this is a dramatic step that continues the Ministry of Immigrant Absorption’s trend and makes it a socioeconomic ministry that places an emphasis on investing in immigrants and returning residents and on their economic contribution to the State of Israel:

"This step involves increasing the amount and number of loans to immigrants and returning residents, expanding their occupational options and improving their absorption in Israel. In recent years we have taken a number of significant steps in order to facilitate matters for immigrants and returning residents in the area of entrepreneurship, and in this instances as well the investment is worthwhile, with a tenfold return on every shekel invested in an immigrant in the State of Israel, this is an equation that any country would be proud of."