Treasury asks banks to help small business
The Finance Ministry has asked the banks for offers to expand a government fund for assisting small businesses. The ministry aims to itself add another NIS 40 million to the NIS 200 million fund as part of its economic stimulus plan, and is seeking another NIS 200 million from the banks.
The fund, operated through banks Otsar Hayayal, the First International Bank of Israel (otherwise known as Beinleumi) and Mercantile Discount, offers loans to small business with turnovers of up to NIS 22 million. Seventy percent of the loan amount is guaranteed by the state.
The fund is earmarking NIS 60 million for businesses in Sderot and other missile-stricken towns surrounding the Gaza Strip. These areas will be entitled to additional benefits including discount interest rates, a grace period of up to a year before repayment of the loan begins, and a fast-track process for loan applicants.
Accountant-General Shuki Oren emphasized the particular importance of providing assistance to small businesses in current conditions, by offering them additional sources of credit. The general assumption is that big businesses are better positioned to weather the worldwide financial crisis, while small businesses operate on narrower margins, have less "padding," and are more vulnerable.
"The fund is a successful one that has proven its importance for small businesses," Oren said. "Over the past five years the fund has provided 3,000 loans to various businesses throughout the country, totaling more than NIS923 million."
Meanwhile, the economic stimulus plan remains on paper. But under pressure from the religious parties in parliament, the Finance Committee yesterday approved an NIS 208 allocation to yeshivas, and another NIS 75 million for families evacuated from the Gaza Strip area in the disengagement plan.
Within about 80 minutes, a group of six members of Knesset had approved NIS 3 billion to NIS 4 billion worth of programs.
The six were Avishay Braverman of Labor, Reuven Rivlin of Likud, Yitzhak Vaknin of Shas, Nisan Slomiansky of the National Religious party. Avshalom Vilan of Meretz and Elhanan Glazer of Haderech Hatova.