(Communicated by the Ministry of Economy Spokesperson)
The Ministry of Economy announces the submission of the annual report of the Small and Medium Business Agency to the OECD. The report is comprised of data regarding credit for small and medium businesses in Israel. Among the main points in the report:
Over 95% of bank credit is granted by the five major banking groups.
The State Guarantee Fund for Small Businesses gave bank guarantees for NIS 2 million in loans.
The activity of foreign capital funds making new investments, rose from 26 in 2009 to 84 in 2013.
Israel is the first of the OECD member states to report their credit data for small and medium-sized businesses in 2014.
The bank credit rate for small and medium-sized businesses in Israel continued its upward trend in 2014, and during that year reached 47.3% of total bank credit for businesses. The report indicates that over 95% of bank credit is granted by the five major banking groups: Bank Hapoalim, Bank Leumi, Bank Discount, Bank Mizrahi-Tefahot, and the First International Bank of Israel. The report also points out that business credit interest continued to fall, and was approximately 4.5% in 2014, about 1.5% higher than the interest for large businesses.
According to the report, during 2013 and 2014, the State Guarantee Fund for Small Businesses, in partnership with the Accountant General at the Ministry of Finance and the Small and Medium Business Agency at the Ministry of Economy, made over NIS 4 billion available for loans. Small businesses in Israel received loans totaling NIS 1.495 billion in 2014 and NIS 1.437 billion in 2013. Medium-sized businesses had NIS 424 million in loans approved in 2014, as compared to NIS 593 million in 2013. The amount of loans increased more than ten-fold during the years surveyed.
Likewise, the Fund operates special tracks. During Operation Protective Edge and its aftermath, for example, the State granted leniencies, through the State Guarantee Fund for Small Businesses, for those businesses that had been harmed. As part of this leniency, the rate of securities demanded from these businesses was lowered from 25% to 10%.
Regarding the venture capital industry, the report reveals that venture capital investments grew by 18% in 2013 as compared to 2012, and totaled around $2.3 billion, including around one quarter by Israeli venture capital funds and the rest foreign VCs. The foreign VCs’ share increased from 50% to 76%. The Small and Medium Business Agency also reports to the OECD that Israel is one of the most advanced countries in the world in the field of venture capital funds. Israel currently has approximately 70 venture capital funds, including 14 offices of international funds in Israel (there is also foreign VC activity without official offices in Israel).
Among the Israeli VCs there is stability in the new investments (first investment in a new start-up company), with approximately 40 active Israeli VCs each year. The activity of foreign VCs making new investments rose from 26 in 2009 to 84 in 2013. In 2009, there was a sharp drop in the number of venture capital investments in Israel, from over $2 billion in the previous year to just $1.1 billion. Over the next few years the industry recovered, and total venture capital investments reached a high of around NIS 2.3 billion in 2013, with this trend continuing during the first half of 2014.