The Knesset Finance Committee today rejected the Ministry of Finance's request to expand by a further NIS 6 billion the credit limit of the aid fund for small and medium-size businesses. Yesterday, the Ministry of Finance asked for an increase in the size of the fund from NIS 8 billion to NIS 14 billion, after the fund had quickly run out: up to yesterday, it had approved some 13,000 loans totaling NIS 5.1 billion, and at the current rate the balance will be distributed within a few days. Besides that, the banks participating in the fund have reached their maximum credit quotas and cannot approve more loans. The Finance Committee's approval is required to raise the state guarantee (currently 15% of the credit provided by the fund) by NIS 900 million.
The members of the provisional Finance Committee, chaired by Oded Forer (Yisrael Beitenu) approved the state's request, but some of them imposed a proviso that data should be produced on the industries that are not eligible for state-aided bank credit. "Some business owners are in despair. At the Ministry of Finance you will find yourselves with more and more closed businesses that could have survived this crisis. We asked for an expanded small business fund. When will we see it? Every day is an eternity for these businesses."
The proviso was submitted by Forer, Ahmad Tibi, Nir Barkat, Ofir Sofer, Michal Shir, and Mansour Abbas. Before the last election, Barkat was presented by Prime Minister Benjamin Netanyahu as the Likud's candidate for minister of finance, but since it became clear that he would not in fact be appointed to the post he has become ever more sharply critical of the ministry and of Minister of Finance Moshe Kahlon.
The Ministry of Finance stated in response: "We regret the fact that Finance Committee chair Oded Forer prevented approval of the expansion of the state-guaranteed loan fund for small and medium-size businesses by NIS 6 billion, which prevents assistance being given to thousands of businesses that have been financially hurt by the coronavirus crisis and need immediate cash flow help at this time. The Ministry of Finance will bring the expansion of the fund for a second vote in the next few days."
In response, Forer attacked the Ministry of Finance, saying, "Time after time, the Ministry of Finance brings before the committee requests for approval of a loan fund to lend money to those who don't need it and that will refuse to lend to those in real need. Instead of raising the state guarantee, they keep proposing loan funds with a 15% state guarantee, which compares with 70-100% in every Western country."
Published by Globes, Israel business news - en.globes.co.il - on April 30, 2020
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