Increasing credit for small businesses is underway – financial consumerism

The new reform of the Bank of Israel is underway, and banks will be able to provide reduced credit against mortgaging mortgage portfolios in order to enable small businesses to better cope with the consequences of the corona. Bank

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Completed the preparations and signed an agreement with the central bank.

Until now, banks could only pledge bonds and liquid deposits in exchange for credit from the Bank of Israel, a move that affected their liquidity ratios and their ability to increase credit to the business sector. The little ones and the little ones.

Following the corona, the Bank of Israel announced in April 2020 that it would allow banks sources of financing at reduced costs, in order to increase the volume of available and relatively cheap credit that the banks would offer to business owners.

As of November 30, 2020, the central bank provided NIS 16.3 billion in monetary loans, but against this financing, the banks were required to pledge liquid bonds or deposits, which affected the banks’ liquidity ratios and their ability to increase the amount of credit they could provide. For the benefit of small businesses.

In July 2020, the Monetary Committee of the Bank of Israel decided to launch a new route, in which the banks will be able to mortgage mortgages instead of bonds and deposits. This means that the banks’ liquidity will increase and thus allow them to expand credit activities to businesses.

Mizrahi-Tefahot is currently completing its preparations and is the first bank to sign an agreement with the Bank of Israel, which regulates the mortgaging of the bank’s mortgage portfolios, in exchange for providing cheap sources of financing from the central bank.

The move will allow the bank to release bonds and deposits, which have been pledged to the Bank of Israel in recent months – and against which NIS 2.2 billion in credit has been provided for the benefit of small and medium-sized businesses, and to mortgage mortgage portfolios in their place.

According to Bank Mizrahi Tefahot: “This solution supports one of the goals of Mizrahi-Tefahot’s strategic plan: to increase business focus. The Bank intends to expand in 2021, also through the new move, the volume of credit to the business sector in Israel, thus continuing to increase its market shares in these segments. “.