| Grant Profile: |
| Project Title: |
Palestinian Facility for New Market Development |
| PCF/LICUS/SPF: |
PCF |
Status: |
Open |
| File Number: |
358
| Region: |
MENA |
| Sector: |
Private Sector Development |
Country: |
West Bank/Gaza |
| FY approved: |
2008 |
Grant Theme : |
Financial and private sector development |
| Keyword(s): |
|
Approved Amount: |
$1,200,000.00 |
 |
Grant Recipient:
UK Department for International Development (DfID) |
Grant Purpose:
The purpose of the Palestinian Facility for New Market Development is to help develop enterprise learning mechanisms that will assist Palestinian enterprises in moving up the competitiveness curve. This will allow them to enter new markets, expand exports to Israel and develop new products. A particular emphasis will be on exports of goods and services to other Arab Countries, Europe and North America. The fund will encourage enterprises to upgrade their capabilities in this highly uncertain environment by sharing the risk of investments in capacity building. It will reimburse enterprises for 50 percent of the cost of an approved expenditure.
|
Grant Activities:
The fund will support activities that help firms upgrade their capabilities and knowledge. Eligible activities would be knowledge based services including: development of export plans, quality and technical certification, product design, market research, marketing plans, attendance at trade shows, quality control upgrades, production management, new information management systems, specialized training.
|
News:
More than 250 people attended the first anniversary celebration of the Palestinian Facility for New Market Development in Ramallah on April 15, 2009. The event was organized under the patronage of Prime Minister Fayyad, and the founders of the project, the World Bank, and the United Kingdom Government Department for International Development. Guests included representatives from the Palestinian Authority, leaders of the Palestinian business community, project clients and service providers, as well representatives from the international donor community and media organizations.
Since the inception of the Palestinian Facility for New Market Development (FNMD) in July 2008, 120 private companies in the West Bank and Gaza from a wide range of sectors have come forward with plans to develop new products or reach new markets. FNMD projects range from $2,000 to $50,000 in grants. While some projects are still underway, clients of the Facility have so far developed four new products, improved six existing ones, launched their products in seven new local markets, and entered 11 new export markets. Palestinian businesses have also gone beyond the region – half of the new export markets are located outside of the West Bank and Gaza. Three new markets are located in Asia, two in Europe, one in North America, and one in Africa.
While the economic situation in Gaza worsened since the military operations in December 2008, the FNMD continued to support the private sector in the region. Seventeen companies from Gaza are currently receiving FNMD grants, 20 have recently applied for FNMD co-financing, and over 170 companies participated in six information sessions to learn more about the available support offered by the program. The program has also engaged 67 local and international business service providers in FNMD projects. Over 85 percent of resources provided to FNMD companies has been allocated for procuring business services from local providers.
With the help of FNMD, PITS (Nablus) has been able to significantly improve their electronic vehicle tracking system. Through the program, Nablus Soap Factory updated their soap product shape and packaging, went to an international trade show for the first time, and is currently selling its product in new markets, including Yemen and Norway. Two of the FNMD beneficiaries also recently recorded their first export sales of small stone and marble finishing products and software systems for the health sector in the Gulf.
Palestinian companies supported by FNMD employ more than 3,749 workers. In 2008, the first year of the Facility’s operation, businesses generated USD $178 million in total sales primarily in the local Palestinian market. Companies generated $7 million in Gaza and $171 million in the West Bank including East Jerusalem. Seventy percent of 2008 revenues ($124 million) originated from sales in the local Palestinian market and 30 percent were generated through export sales ($54 million). Exports to Israel amounted to $19 million, and sales to other international markets totaled $35 million.
Despite the success of their businesses, half of FNMD-sponsored companies do not sell outside West Bank including East Jerusalem and Gaza. Inside Palestine, companies are reporting frequent delays and security checks of their products at checkpoints, as well as the need to take longer routes. Food stuff producers report that the long delays at checkpoints affect their product quality, especially in the hot season. The long delays and re-routing also lead to overtime costs for the drivers, inefficiencies in the use of corporate trucks, and extra fuel costs.
Transportation from Palestine to Israel also adds complications, due to the fact that Palestinian trucks are not allowed to cross into Israel, and goods thus need to be unloaded, checked and re-loaded onto an Israeli truck. Exports to Israel are thus often not desired by Palestinian companies-clients of the FNMD.
As the West Bank and Gaza continue to be characterized by severe constraints in regard to moving goods and services across borders, a large part of the private sector is unable to conduct business operations, particularly in manufacturing, as raw materials are not allowed in nor exports out. Despite the challenges, however, some sectors are able to operate partially in this situation, such as the information and communication technology and food sectors. The FNMD has been targeting and supporting businesses in these industries.
|
|
