The Bank of Israel launches a new pillar of the program to ease terms of credit to small and micro businesses

Since the outbreak of the coronavirus crisis, the Bank of Israel and the Ministry of Finance have taken several steps intended to increase the supply of credit to small and micro businesses, and to ensure that the credit will be extended to them at convenient interest rate terms, despite the risk inherent in providing credit to such businesses at this time.


Under these special circumstances, in order to strengthen the passthrough from monetary policy to the credit market and to lead to an effective reduction of the interest rate on credit to small and micro businesses, and to moderate the adverse impact that these businesses have endured due to the coronavirus crisis, the Monetary Committee decided to launch a new pillar of the  program to ease terms of credit to small and micro businesses, at a scope of NIS 10 billion, that will be in effect until the end of June 2021. Within the framework of the program, the Bank of Israel will provide the banking system with loans for a term of 4 years, at a fixed interest rate of negative 0.1 percent, against loans that the banks extend to small and micro businesses, provided that the interest rate on the loans to the small and micro businesses does not exceed Prime+1.3 percent.