Microfinance
Microfinance targets owners of productive projects in order to finance working capital and fixed assets. Microfinance is offered to the owners of productive projects in stages whereby the value of the loan rises, the payment period increases and interest rate decreases. Moreover, Bank of Palestine offers consumer loans and other loans for the purpose of improving the housing of owners of productive projects based on their ability to pay the installments from cash flows for the projects, provided that there is no synchronization of any two types of three loan products already mentioned.
Target Customers
This loan service targets the owners of productive projects who are most often non-bankers (who are not eligible to obtain ordinary bank loans or need facilitated loan terms and speed in handling the loan application).
Eligibility Criteria
- Project has been in place for at least one year.
- Project must achieve cash surplus adequate to pay the installments.
- Project site must be located within the areas where the bank operates.
- Surety of at least one guarantor or a car or gold mortgage. The guarantor may have his salary transferred to the bank or have account transactions with the bank. In addition, the guarantor may have a salary and account transactions at another bank while receiving cheque for the amount o the loan and having the interest within to his account at the other bank.
- Guarantees for the improvement of housing loans are the same up to USD 5000 but require a second guarantor when the volume of the loan rises from USD 5000 to USD 10,000, and a third guarantor when the volume of the loan rises from USD 10,000 to USD 15,000.
Features of Microfinance
- Quick handling of loan application.
- Facilitated lending terms.
- Individuals illegible for receiving ordinary bank loans can utilize this service.
Commission and Interest Incurred on Microfinance
The following tables show the project loans.
|
Credit History |
Amount USD |
Working Capital |
Fixed Assets |
Fixed Monthly Interest |
Allowance Period |
Commission |
|
None |
Less than 1,000 |
6-12 months |
12-18 months |
1.5 |
None |
1% in advance
|
|
1,000-5,000 |
6-12 months |
12-18 months |
1.2 |
None |
1% in advance
|
|
|
6 months |
1,000-6,500 |
6-12 months |
12-24 months |
1.0 |
None |
1% in advance
|
|
12 months |
1,000-8,000 |
6-12 months |
12-36 months |
0.7 |
None |
1% in advance
|
|
24 months |
1,000-10,000 |
6-12 months |
12-36 months |
0.7 |
None |
1% in advance
|
|
30 months |
1,000-12,500 |
6-12 months |
12-36 months |
0.7 |
None |
1% in advance
|
|
26 months & over |
1,000-15,000 |
6-12 months |
12-36 months |
0.7 |
None |
1% in advance
|
2. Addition of new products to microfinance:
1. The following table shows the policy for housing loans.
|
Amount USD |
Minimum Period |
Maximum Period |
Fixed Monthly Interest |
Allowance Period |
Commission |
|
1,000-5,000 |
12 months |
36 months |
1.2% |
None |
1% in advance |
|
5,001-10,000 |
12 months |
42 months |
1.2% |
None |
1% in advance |
|
10,001-15,000 |
12 months |
48 months |
1.2% |
None |
1% in advance |
2. The following table shows the policy for personal loans:
|
Loan |
Amount Limit USD |
Maximum Period |
Monthly Interest |
Allowance Period |
Commission |
|
Personal |
3,000 |
18 months |
1.2% |
None |
1% in advance |
