“Since the outbreak of COVID-19 we’ve been inundated with loan requests like never before,” said the bank’s CEO.
By Eliana Rudee, JNS
Israel’s first nonprofit bank, the Ogen Group, announced on Monday that it has raised $30 million from donors and impact lenders from Israel and abroad to provide emergency survival loans and financial mentoring to small businesses, nonprofits, and unemployed and furloughed workers in Israel.
The Ogen Group also announced that it plans to double its daily lending activity, injecting “life-changing capital” to disadvantaged segments of the Israeli public, aiming to increase upward economic mobility for low- and middle-income families, as well as small-business owners, as “unemployment soars and the global economic shutdown wreaks havoc on the livelihoods of millions of Israelis.”
“Since the outbreak of COVID-19 we’ve been inundated with loan requests like never before,” Sagi Balasha, CEO of the Ogen Group, told JNS.
“The financial damage done by the pandemic is immense, and despite having just raised $30 million, we will still need to raise an additional $70 million to begin to meet the full scope of demand that exists,” he added.
Whereas some Israeli business owners have reported that they have yet to see approved governmental loans and aid packages, Ogen promises to deliver loans within seven business days, lending without guarantors for the first time in Ogen’s 30-year history.
Originally established to help new immigrants from Ethiopia and the former Soviet Union adjust to their new lives in Israel, the Ogen Group—formerly known as the Israel Free Loan Association (IFLA)—was founded by the late Professor Eliezer Jaffe, and has provided more than 65,000 interest-free loans since 1990, totaling more than $350 million.
Now, after issuing a large first wave of emergency loans, distributing $2 million in interest-free personal loans, nearly $3 million to small businesses and more than $3.5 million to help non-profit organizations, Ogen utilized almost all of its available lending funds—barely scratching the surface of the need for affordable credit in the wake of COVID-19, maintained Balasha.
More than 1 million workers have registered as unemployed or on unpaid leave in Israel since the pandemic began, some 54 percent of whom are self-employed and ineligible for unemployment benefits. Additionally, noted an Ogen press release, 20,000 small businesses have been turned away for government-backed loans.
Unfortunately, he said, this has caused 25 percent of Israeli nonprofits “on which hundreds of thousands of Israelis depend for daily services in health care, welfare, education and more,” to close their doors.
In addition to Ogen’s lending program, the organization has expert financial mentoring and guidance options to decrease defaults, in partnership with donors, including Google.org and Israel’s National Insurance Institute (Bituach Leumi).
Much of the new funds that Ogen has received come from a single anonymous Israeli donor who contributed $20 million, as well as additional philanthropists and organizations worldwide who have made significant contributions, including Trudy and Bob Gottesman, the Russell Berrie Foundation, the Max & Marjorie Fisher Foundation, the Jewish Agency for Israel, the Max Barney Foundation from the United Kingdom, Jewish Communal Fund, PEF Israel Endowment Funds, the UJA Federation of New York, Migdal Group and Boaz Raam, alongside a number of additional anonymous contributors.
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