In June 2004, OFID created the OPEC Fund Micro Enterprises for Palestine (PALFUND) scheme, with an initial contribution of US$2.5 million, to support Palestine’s private sector by developing micro-enterprises in the occupied territories. As the largest microfinance institution in occupied Palestine and with a commendable success record, it was natural that OFID should opt for UNRWA as the choice implementing partner. The initial amount in PalFund was later raised to US$7 million through a further contribution of US$4.5 million, in keeping with an agreement which I signed in August 2007.
In 2008 the department’s received the second contribution of US$ 4.5 million to the PalFund, taking the OFID’s cumulative investment in the Trust Fund to US$7 million, minus one 2005 start-up deduction of US$ 125,000 for initial program support costs. This additional capitalization allowed the MD to expand PalFund lending in Gaza by 34 percent, although the continuation of Israel’s blockade on the Strip did not allow a substantial rebuilding of the PalFund’s Gaza portfolio to levels recorded before the onset of the 2006 economic crisis.