the Ministry of Economy is issuing a tender to promote non-bank credit

The Small and Medium Enterprises Agency in the Ministry of Economy and Industry is issuing a tender to promote non-bank credit. This publication follows the conclusion of Minister of Economics Eli Cohen and the Deputy Minister of Finance to promote competition in the credit market for small businesses by institutional bodies in a manner that will constitute competition for the banking system.
According to the agreement, the Small and Medium Business Agency in the Ministry of Economy is issuing a tender for non-bank entities to set up a credit system for businesses in which NIS 50 million will be provided to entities that will set up a credit system. Small and medium sized companies, and not less than NIS 1 billion in total (half a billion each).
The tender will be able to access credit companies who will contact an institutional body or an institutional body that undertake to hold credit of at least NIS 500 million within five years for small and medium-sized businesses. In addition, the credit portfolio will have a duration (average duration) of at least six months.
Small and medium-sized businesses account for 54% of business-sector product, but enjoy only about 25% of business credit. This is partly due to the fact that today the credit market for small and medium-sized businesses is almost exclusively controlled by the banking system, with the two large banks controlling two thirds of the credit to businesses.
The need to promote competition was raised by a number of public committees, from the old age committee in 2013, as the Supervisor of Banks to the Strom Committee in 2016, that "the large dependence of small and medium-sized businesses on banks' credit sources enables banks to exploit their market power in this sector."
"The banks are the main and most significant source of credit for small and medium-sized businesses today, as opposed to the large businesses that are able to raise credit from institutional bodies and the stock exchange," he said. The introduction of institutional bodies as a source of credit for small and medium-sized businesses will lead to increased competition with banks and improved conditions for business owners in Israel. "