JERUSALEM (1/1/2020) The Ogen Group, which is currently in the process of establishing Israel’s first social bank, and which received an expanded credit services provider license from the Israel Capital Markets Authority in September, is expanding the services it provides to small businesses. Ogen will now provide loans of up to ILS 200,000 at a fixed 5% interest rate, secured by one guarantor and without the need to set aside any form or deposit or financial collateral. The loans, which will be issued starting today (January 1), are intended for businesses with an annual sales turnover of up to ILS 3 million or newly established businesses. In order to receive a loan, businesses will need to submit a loan application prepared together with a specialist small business consultant.
The social goal underpinning Ogen’s business loans is to make affordable credit available to businesses who otherwise would only have access to high–interest non-bank loans that could threaten their success. Ogen’s lending helps micro and small businesses to blossom under fair and reasonable terms, helping them to grow and expand. This is an integral step in the Ogen Group’s vision of improving financial empowerment and opportunity in the Israeli economy.
According to data from the Ministry of Economy and various polls, approximately 90% of new businesses don’t survive their first few years, and each year over 40,000 Israeli businesses close. Ogen believes that a primary reason for this bleak situation is the lack of sufficient management knowledge and experience among new entrepreneurs. For this reason, Ogen only gives loans to businesses that work with business advisors. This policy has proven effective for Ogen to date , leading to an impressive track record of acheivements as a non-profit lender. A survey conducted for Ogen by Meida Shivuki C.I., one of Israel’s largest market research firms, found that of a sample of 200 businesses who received loans from Ogen in the past five years, 90% still operate and 73% reported that their business have improved since taking the loan.
Ogen’s new business loans are funded by social impact investors from Israel and around the world. Loans are given under the auspices of “Ogen – Social Loan Fund”, which, as mentioned, is currently in the stages of becoming Israel’s first not-for-profit social bank.
Sagi Balasha, Ogen CEO, “Each year, Ogen helps thousands of businesses, households and non-profit organizations become successful. We strive to bring fairness and equality to the Israeli financial market by providing credit and financial guidance that help people thrive. The credit solution that we offer will provide a solution for businesses that previously had no access to fair credit, helping more businesses prosper.”
About The Ogen Group
Ogen was founded 30 years ago as the Israel Free Loan Association. Over the course of the past three years, Ogen has expanded its scope of activity and is currently in the process of establishing Israel’s first not-for-profit social bank. The goal of the Ogen Group is to make affordable credit accessible to all, to bring fairness and equal opportunity to Israel’s financial sector, and to promote social mobility in the process. The Ogen Group comprises:
- Ogen – Free Loan Fund: A not-for-profit organization funded by donors from around the world that provides interest-free loans to families in need who face large expenses that could threaten their financial stability.
- Ogen – Social Loan Fund: A Public Benefit Company (PBC) funded by impact investors from around the world. In its initial format, The Social Loan Fund will offer low-interest credit to small businesses, families purchasing their first homes and bridge loans for non-profit organizations that provide services for the government. In the near future, once Ogen is licensed by the Bank of Israel, The Social Loan Fund will become Israel’s first not-for-profit social bank.
- Ogen La’Bayit: A specialized coaching program for first-time homebuyers in Israel’s socio-economic periphery. The program is fully funded by donors and is provided to participants free of charge.
- Keren Shemesh: A Public Benefit Company (PBC) that operates a cadre of nearly 600 entrepreneurs and senior business executives who volunteer to mentor young entrepreneurs and help them launch their own successful businesses.
- Crowd IL: A non-profit peer to peer (P2P) crowdfunding platform that will allow young investors from around the world to provide microloans to entrepreneurs from Israel’s social and geographical periphery. Crowd IL was launched as a PBC in partnership with the Jewish Agency and will become operational in 2020.
Source: Israel in the News