The European Union and the European Investment Bank have officially begun implementing a €400 million financial facility aimed at strengthening Palestinian micro, small and medium-sized enterprises. The initiative, first announced in October 2025, entered its execution phase on 8 June 2026, marking a significant step in EU-backed economic support for the region.
Under the new arrangement, approximately $395 million will be distributed through local financial institutions rather than directly to businesses. The funds will be routed via major Palestinian banks under the supervision of the Palestine Monetary Authority, ensuring structured lending to the private sector.
The participating financial institutions include Bank of Palestine, Quds Bank, Palestine Investment Bank, The National Bank, and Cairo Amman Bank. These banks will act as intermediaries, providing credit to small and medium-sized enterprises across key sectors of the economy.
The facility is designed to improve access to financing for businesses operating under difficult economic conditions. By increasing liquidity in the banking system, the programme aims to help companies maintain operations, protect jobs, and sustain essential economic activity.
European officials have emphasized that the initiative is intended to support economic resilience in the West Bank, East Jerusalem, and Gaza, where businesses continue to face significant financial pressure.
In addition to lending support, the package includes €2.1 million in technical assistance. This funding is part of a broader support envelope and is intended to strengthen financial systems, improve lending capacity, and enhance the overall ecosystem for small and medium-sized enterprises.
The facility forms part of the European Union’s wider Multiannual and Comprehensive Programme for Palestinian Recovery and Resilience, which totals up to €1.6 billion for the 2025–2027 period. This broader programme combines grants and development financing aimed at supporting governance, infrastructure, and private sector recovery.
The European Investment Bank has been active in Palestine for decades, providing substantial financing and support to infrastructure and private sector development. This latest initiative reinforces its role in expanding access to finance and encouraging economic stability through partnerships with local banking institutions.
