Japan International Cooperation Agency (JICA) and the Bank of Palestine (BOP) signed a $30 million Loan agreement for an Additional Tier 1 Investment in the capital of the bankfor the purpose of lending to small and medium enterprise (SME) projects. The loan is perpetual but can be converted into common equity shares should an agreed upon trigger event occur. The instrument will enter into effect later in 2023 and will require approval of the bank’s general assembly.

Hashim Shawa, Chairman, Bank of Palestine, said: “This is the first such instrument to be introduced in Palestine as a way for the bank to meet its capital adequacy requirements in order to continue its growth journey focusing on the MSME segment..

As the main lender to MSMEs, we remain committed to financing our nation’s ambitious entrepreneurs and ldeveloping the economy of Palestine. We are appreciative of Japan’s interest in the well-being of the Palestinian people and the impact their investment will create on the social and economic advancement of the country.. We look forward to expanding our relationship with JICA to work on other tracks in future, in addition to their partnerships with the private sector in this domain.”.

Bank of Palestine is the largest financial group in Palestine with total assets of USD$6 billion and a market share of 33 per cent in terms of credit facilities and customer deposits. The bank is a universal bank lending to the corporate, retail, SMEs and public sector.

The bank adopts a holistic sustainability strategy focused on good governance, mitigation and adaptation of climate change risk and community development. The bank enjoys healthy financial indicators and will be achieving a strong capital adequacy ratio because of the AT1 instrument reaching a share capital of $253 million. The bank is also a leader in financial inclusion focusing on underserved segments including women, youth, startups and people with special needs.