KIEDF to give loans to small businesses following operation Pillar of Defense, which caused slow economic activity in South.
By DANIELLE ZIRIEmpty 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 Wednesday.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.”The Koret 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 businesses.”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.
“Essentially, philanthropists are making an investment in jobs, in economic development, Kaplan told The Jerusalem Post.“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 contributions.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 it.“What we are doing here, in fact, is helping people help themselves,” Kaplan said.
