Bank, Trade Group Wrangle Over Who Gets Credit in Israel

YERUSHALAYIM -
An Israeli flag flutters outside the Bank of Israel building in Yerushalayim. (Ronen Zvulun/Reuters/File)

In a recent report, the Bank of Israel stated that there had been an 18 percent increase in the amount of credit granted to small and micro-businesses. Altogether, such businesses benefited from 43 percent of the credit granted by banks overall.

But the Bank’s report is misleading, according to the Labor and Industry Organization, which represents many small businesses. According to the group, the Bank’s accounting lumps together both micro-businesses, which have less than a million shekels a year in business, and small businesses, which have up to NIS 50 million a year.

According to a spokesperson for the group, “The sad truth is that 90 percent of businesses in Israel do business of NIS 2 million, and they only receive 13 percent of the credit given by banks. Seventy-six percent of businesses have up to NIS 1 million of business or less, and the Bank does not supply information about them at all.” Data compiled by the group indicates that barely half a percent of all businesses in Israel receive nearly half the credit allocated by banks, while 90 percent of businesses made do with just 13 percent of the credit offered.

According to Liat Gur, chairperson of the group, “The Bank uses a well-known accounting trick in order to improve its statistics – that of widening the categories in question. The inequalities in the economy still exist, with just a few large businesses getting much of the credit. And in addition, the credit that is offered to small businesses comes at a higher interest rate.”

In response, the Bank of Israel said that “unfortunately the figures released by the Organization are the misleading ones. According to the figures we released, businesses that have an annual turnover of NIS 10 million get 29 percent of the credit offered to businesses, while micro-businesses with turnover of up to NIS 2 million get 13 percent. Large businesses, with turnover of NIS 250 million or more, get 38 percent of the credit.”