Empty shuk in Sderot 390.
(photo credit:Marc Israel Sellem/The Jerusalem Post)
During operation Pillar of Defense, as in many previous military conflicts, slow
economic activity hurt small businesses in the South.
This is what Ilan
Fitusi, who owns an event production company in Beersheba, experienced during
the aerial conflict with Gaza in November.
“We had about 15
cancellations. People didn’t feel like celebrating, when things like these
happen, your head is just not in the right place for an event,” he explained on
As he was facing financial struggles, Fitusi turned to the
Koret Israel Economic Development Funds for help.
“They had helped me
with a loan before, but this time it was more an immediate help. They lent me an
amount to be able to go through that difficult time in peace.”
Israel Economic Development Funds was created by the Koret Foundation in the
early 1990s to engage in micro financing and help develop small businesses in
Israel by granting them five-year loans.
“At the time, in 1993, the banks
were the only source of capital, they are essentially today the only source of
capital, and if you wanted to borrow a dollar, you had to put up a dollar of
security and it was very discriminatory against small businesses,” managing
director of the Funds, Carl Kaplan, explained recently.
“At the same
time, small businesses create jobs, so the idea was to try to figure out a way
how we could, in a businesslike manner, facilitate lending to small
Since 1993, KIEDF has approved more than 9,118 loans and
leveraged over $194 million of financing to nearly every conceivable type of
small and micro business, affected or not by war, from Metulla to Eilat, the
organization says on its website.
To do so, KIEDF uses philanthropic
resources to contribute to the private sector and so spur economic development
and create jobs. The organization believes this is essential to build a strong
and competitive private sector in Israel.
are making an investment in jobs, in economic development, Kaplan told The
“I strongly believe that the future of Israel’s relations
with the Diaspora is economic,” he added.
According to Kaplan, more than
70 percent of small businesses can’t get business credit from banks today in
Israel: “We help people from disadvantaged groups who know they have no chance
of getting bank loans.”
These include women, Beduin, Arabs, Ethiopian
Israelis and other minorities, he said.
The organization relies on
Kaplan explained that in the past few years, raising money
has been a struggle: “We are not the only nonprofit that has experienced that
lately,” he said. “I think most philanthropists who weren’t born with a silver
spoon in their mouths forget that somewhere along the way in the beginning,
someone guaranteed their first bank loan, or someone opened the door to get them
their first contract.”
In addition to providing loans, KIEDF brings in
professional consultants who come up with business plans to help the business
owner maximize. He then receives assistance and guidance in implementing
“What we are doing here, in fact, is helping people help themselves,”
Relevant to your professional network? Please share on Linkedin