Swedish Guarantee Facility TA/ SGF2 MEII
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The grant funded technical assistance program through MEII has a two-folded purpose: 1) technical assistance and capacity building proper, 2) management of the Swedish Guarantee Facility (SGF2). The MEII technical assistance program (TAP) works with direct technical assistance to SMEs on accounting capabilities and financial literacy. MEII’s capacity building...
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- C01 - Project-type interventions
To
Breakdown of the total amount paid for the entire contribution.
- Palestine, State of30.55 M SEK (100%)
Within
Breakdown of the total amount paid for the entire contribution.
- Banking and financial services30.55 M SEK (100%)
Contribution period
Financial information
Sustainable Development Goals
More about the contribution
The grant funded technical assistance program through MEII has a two-folded purpose: 1) technical assistance and capacity building proper, 2) management of the Swedish Guarantee Facility (SGF2). The MEII technical assistance program (TAP) works with direct technical assistance to SMEs on accounting capabilities and financial literacy. MEII’s capacity building works to equip entrepreneurs with the knowledge and capacity to fully understand their financials, to confidently present their business’ financial reports and thereby improve their chance of getting a loan and expanding their business. MEII is trying to give priority and preferential treatment to female-run businesses and has in the previous phase of cooperation been collaborating with local chambers of commerce and unions. The technical assistance also includes a matchmaking platform where entrepreneurs anonymously can present their financial needs to multiple financial intermediaries including banks, leasing companies, equity investors, and microfinance institutions. The proposed contribution will also include technical assistance to: develop the ability of financial intermediaries to better underwrite renewable energy loan applications, engage local technical experts to conduct energy efficiency assessments for MSMEs with high energy consumption needs, and develop an awareness campaign for MSME’s regarding the benefits and cost saving associated with investing in renewable energy and energy efficiency equipment and technologies. Further, the proposed contribution will also finance MEII’s management of the Swedish Guarantee Facility (SGF), which is set up in a separate contribution (PLANit ID 11275). The proposed guarantee facility is set up by Sida and the Middle East Investment Initiative (MEII). It builds on experience from the first phase of the SGF and is designed to increase access to finance of MSMEs in the marginalized areas of East Jerusalem, Gaza, Hebron and Area C of the West Bank. Under SGF2, Sida issues a guarantee to MEII, expected to amount to USD 29 million. MEII, who works as an intermediary between Sida and the participating financial institutions (FIs), extends the Sida guarantee to the FIs who may place eligible loans under the guarantee. In the facility, nine FIs with operations in Palestine will participate, of which seven are Palestinian and two Jordanian. These include both regular banks and microfinance institutions. These will be selected in advance of launching the facility, so is their respective share of the maximum guarantee amount. The SGF2 is a revolving guarantee facility, meaning that repayment of loans allows the FIs to place new loans under the guarantee (within the fixed share amount of each respective FI.)
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Total aid 30,554,000 SEK distributed on 0 activities
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Result
Highlights of results vs targets during the reporting period, i.e. 2022: Guarantee (SGF) -MEII approved 438 SGF2 loans totaling $24,766,563 compared to a target of 196 loans totaling $16 million. -2,436 jobs were sustained by theses MSMEs compared to a target of 877. -33% of the SGF2 loans went to new lender clients compared to a target of 55%. (On a cumulative basis 41% of SGF2 loans went to new lender clients.) -MEIIs loan approval rate was 70% compared to a target of 85%. Interestingly, the approval rate for banks was higher at 77% compared to a lower approval rate for MFIs of 67%. -The trading sector accounts for nearly 36% of SGF2 MSMEs, followed by agriculture at 25%. The SGF2 portfolio is fairly diversified and quite representative of a wide array of economic sectors. In terms of geography it can be concluded that almost USD 12 million out of the almost USD 25 million of the approved loan amounts as per 2022 is in Area C, which gives a good indication on how the SGF2 is pushing credit towards marginalized areas where not so many other facilities reach. Technical Assistance Program (TAP) -332 MSMEs received technical assistance, compared to a target of 343. -94 micro-enterprises were trained, compared to a target of 86. -181 accounting software programs were installed, compared to a target of 181. -28 university interns were trained compared to a target of 29, and 50% of those found post-internship employment. -58 business plans were developed compared to a target of 48. -230 new MSMEs registered on the Tamweeli Platform compared to a target of 172 and 153 MSMEs completed the Tamweeli loan application process to get their loan requests posted. -25 SME energy audit assessments were completed, compared to target of 25. -There were a total of 323 loans approved for female entrepreneurs accounting for 47% of the SGF2 approved loans. The Tamweeli platform is reaching a leading position in its function, both I Palestine and regionally. The PAs 2015 Financial Inclusion Strategy set a target of 50% by the end of 2025 with Fintech playing a significant role in the strategy. Latest figures show that the financial inclusion rate among adult individuals currently stands at 36.4%. Tamweeli is well positioned to support the PAs financial inclusion targets and is slowly evolving from a matchmaking platform for SME loans to a more holistic financial inclusion platform as new products and services are introduced.
The overall Swedish engagement with MEII in Palestine is designed to support private sector activity in the marginalized economies of East Jerusalem, the Gaza Strip, and Area C of the West Bank under the two interlinked contributions; Swedish Guarantee Facility 2 (SGF) and the Technical Assistance Programme (TAP). The TAP entails: 1) Tamweeli Matchmaking platform, 2) Financial literacy TA for MSMEs (Mashroi3), 3) TA for renewable energy and energy efficiency, and 4) Accounting and bookkeeping internship program. Under the Swedish Guarantee Facility, the intervention will stimulate appropriately structured credit to eligible micro, small and medium enterprises (MSMEs) by providing lenders with partial loan guarantees. Under the Technical Assistance Program, the contribution shall provide technical assistance to MSMEs to improve their financial literacy and accounting capabilities and providing technical assistance and public awareness on Resource Efficient and Cleaner Production (RECP). In order to facilitate these interlinkages, MEII has developed an integrated results framework for the SGF2 the TAP at impact level. The overall impact is formulated as: - The number of business and job creation in Sweden's target areas have increased. - Palestinian SMEs access to affordable, reliable, and clean source of energy. It is assessed that an integrated framework at impact level is conducive to ensure synergies between the SGF2 and TAP. At outcome level, the expected results are tailored specifically for the SGF2 and TAP respectively. For the TAP, they are formulated as: - Improved financial literacy and transparency of Palestinian MSMEs, and female entrepreneurs. - Develop financial instruments and experience for renewable energy projects.
Swedish aid in numbers and reports
Do you want to read more about the results of Swedish aid?
Reports from the Expert Group for Aid Studies and Sida's strategy and corruption reportsSida's annual report (Swedish only)