Proparco picking up equity stake in Bank of Palestine

 Proparco picking up equity stake in Bank of Palestine

French development finance institution Proparco is investing $12 million in the Bank of Palestine, a publicly listed company on the Palestine Stock Exchange and the largest financial institution in the region.

Although further details of the transaction were not shared, Proparco is likely to pick up a stake of around 3.3% in the bank, as per The Capital Quest estimates.

Proparco is buying the stake through the fund-of-funds Fonds d’investissement et de soutien aux entreprises en Afrique (FISEA), which was created by its parent Agence Française de Développement (AFD) Group in 2009.

“This equity investment will expand access to finance to more than 200 SMEs and corporates, thus impacting indirectly up to 10,000 jobs, and will stimulate the growth of the bank’s credit offer to individuals,” Proparco said.

This will be accompanied by a multi-year technical assistance program of up to €340,000 funded by French government grant, through which Proparco will support the bank’s investments in financial and digital inclusion and to develop its systems and policies.

AFD and Proparco, a subsidiary focused on private-sector development, have had a long-standing relationship with Bank of Palestine, providing essential financing and technical assistance to SMEs through the ARIZ guarantee facilities and renewable energy with the SUNREF program.

Bank of Palestine has a market share of 30% and a footprint that covers the entire geography of the West Bank and the conflict-ridden Gaza, as well as representative offices in Chile and the UAE. It has over 1 million customers including in underserved areas such as the Gaza Strip and specially looks at financing small and medium enterprises (SMEs) and women entrepreneurs in Palestine.

The deal comes after Bank of Palestine’s extraordinary general assembly approved to raise the capital of the bank to $250 million. After the special issuance of shares, its paid-in capital will become $217.4 million, in conformity with the bank’s capital adequacy plans for growth.

Aman Malik

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