Treasury admits bureaucratic failure in business aid fund

Oded Forer

Of 3,444 applications for loans from the fund for small and medium-size businesses, only 25 have been approved.

The Accountant General Department at the Ministry of Finance recognizes the failure of the mechanism created for the fund for loans to small and medium-size businesses with state guarantees, which included intermediaries between the Ministry of Finance and the banks. At a session of the Knesset Finance Committee this morning, a representative of the Accountant General Department revealed that out of 3,444 applicants to the fund, only 25 had had loans approved. The Ministry of Finance is now eliminating the intermediaries.

The Ministry of Finance representative said that average interest on the loans would be prime plus 1.5%, with a grace period of a year for paying interest. The total of the loans approved so far is a mere NIS 7.2 million, a fraction of a percent of the budgeted amount.

Acting Finance Committee chairman MK Oded Forer scathingly criticized the government's management of the aid fund. "This government is detached from what is happening on the ground. The minister of finance, the prime minister, the minister of economy and labor need to understand that the crisis depends by the day, and by their conduct they are making it deeper still. The people who pay the government and ministers' salaries are sitting at home not knowing whether they will have the wherewithal to live the next day," Forer said.

Forer also had criticism for the banks. "The heads of the banks are exploiting the crisis to snatch a bit more at the expense of the ordinary citizen. They are raising interest rates. You have responsibility, you can't stay in the ivory tower of your unending pay and come to the citizen who makes his monthly payments and unilaterally raise the interest rate he pays. Where is the Supervisor of Banks? The government needs to manage the crisis on this level too," he said.

Published by Globes, Israel business news - - on March 30, 2020

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