FOR IMMEDIATE RELEASE (Jerusalem, Israel January 7, 2009)
Koret Israel Economic Development Funds (KIEDF) and Bank Leumi are launching the Initiative for the development of the Negev and the North at the President's Residence today. Over the next seven years the initiative will grant 600 million shekels of credit for the development of new and expansion of existing small and medium businesses. KIEDF initiated the program in partnership OPIC, Overseas Private investment Corporation, a branch of the U.S. government for private investments in foreign markets, who is supplying $10 million in guarantees to assure implementation of the program. American Friends of KIEDF and Portland Trust are among the first financial supporters of this program.
Thousands of small and medium businesses from the Negev and the Gilboa regions will benefit from loans between 50,000 New Israeli Shekels (NIS) and 700,000 NIS with the attractive lending rate of prime +1.5%. In addition, through this partnership, businesses will need to provide a significantly lower amount of personal capital compared to existing loan terms.
The program is being launched today at the President of Israel's official residence, with the participation of President of Israel, Mr. Shimon Peres; Chairman of Bank Leumi Board of Directors, Mr. Eitan Raff; KIEDF Chairman, Mr. Eival Gilady; President and CEO of Bank Leumi, Mrs. Galia Maor; Managing Director of KIEDF, Mr. Carl Kaplan; OPIC Vice President, Mr. Robert Drumheller; Chairman of Portland Trust, Sir Ronald Cohen and additional senior officials.
President Shimon Peres praised the Initiative: "We are all partners for one noble promising goal – development of the Negev. Your joint undertaking answers several needs but the foremost being reducing unemployment and poverty. Creating 8000 new jobs and factories is the best answer to such challenges. As the President I praise all the partners of this Initiative for your commitment and contribution for the strengthening and development of the Negev."
Eival Gilady, Chairman KIEDF explained, "We are speaking of an unprecedented program of credit levels to the periphery. Allocation of credit to these amounts for businesses in the Negev and [the North] will create significant development in the regions and grant much needed economic oxygen to many business owners and entrepreneurs. This program will develop jobs, increase production, income and decrease unemployment – important steps for improving the economic situation of Israel's periphery.
Carl Kaplan, KIEDF Managing Director, said: "We established KIEDF 16 years ago as a small initiative in the Negev. Now we are returning in a big way to finish what we began a decade and a half ago. We have great appreciation for the involvement of Bank Leumi and OPIC to create with us, for the first time, a major program to stimulate economic development and create thousands of jobs in the Negev."
Chairman of Bank Leumi Board of Directors Mr. Eitan Raff emphasized that Bank Leumi sees great importance in the partnership with KIEDF for the development and growth of small and medium businesses in Israel's periphery. "In this program I see a continuation to the assistance we have granted to residents of southern Israel during the recent fighting in Gaza when we developed no-interest loans for residents to be prepared … The Loan program with KIEDF developed from our sense of corporate responsibility where we believe on the need to balance social needs with our business strategy," explained Raff.
KIEDF operates diverse range of programs for economic development. Since inception, KIEDF has facilitated close to 900 million Shekels in financing to close to 8,000 small and micro businesses in Israel while creating and supporting more than 40,000 jobs. KIEDF created a special fund to support Northern Israeli residents during the second Lebanon war and for residents of Gaza periphery during Operation Cast Lead in Gaza.