“Sharakat” is a unified investment and financing platform that was established in 2012. It is responsible for structuring, managing and monitoring the various PIF-investments in the MSME space, in addition to monitoring a number of existing and new MSME financing and guarantee facilities and investment vehicles that are managed by PIF partners.
“Sharakat” Investment Fund targets specific vital economic sectors, such as industry, agro-business, IT, microfinance, in addition to certain geographic areas, including Jerusalem and Dead Sea and Jordan Valley region. PIF’s commitment to “Sharakat” consists of US$ 90 million, over the next five years. “Sharakat” plans to secure additional financing through local, regional and international investors and partners of PIF.
Despite the initial focus on certain sectors and geographic areas, “Sharakat” Fund will be open to considering opportunities in various other sectors and geographic areas.
“Sharakat” Fund consists of allocations that are directly managed by PIF’s investment team, and other allocations that are managed by partners.
Economic Overview of (MSMEs) Sector
- MSMEs in Palestine are typically family owned and characterized by low capitalization, operational flexibility as well as low start-up and operating costs.
- MSMEs are also home to some of Palestine’s best entrepreneurs and innovators.
- Palestinian MSMEs are mainly concentrated in the services and retail sectors with large number of enities operating in agriculture and industry.
- Over the years, Palestinian MSMEs have managed to build significant resilience in the face of political uncertainty and volatile market conditions.
- MSMEs in Palestine are significant contributors to economic growth and job creation, in addition to their contribution to entrepreneurship and innovation.
- However, like any other economic sector in Palestine, the MSME sector faces a number of challenges that are hindering its growth. The main challenges include limited access to investment capital, managerial expertise, technology and know-how, corporate governance support, and business and government networks
Sharakat Fund’s Mandate
“Sharakat” Fund’s mandate is to facilitate the channeling of equity and debt capital in a sustainable and commercially sound manner into the MSMEs space in Palestine, aimed at promoting the MSMEs sector’s development and growth. To achieve this goal, “Sharakat” can engage in a diverse set of investment activities that range between direct and indirect equity investments to direct and indirect loan provisions and loan guarantee schemes.
Generally speaking, “Sharakat” fund aims to benefit enterprises that share the following characteristics:
- Existing MSMEs (fair value less than US$ 20 million) based in Palestine, with a small allocation (10% to 20% of total funds) to greenfield projects that have compelling and complete business plans, clear growth potential, and competent and capable management.
- Competent, experienced, credible and open minded management teams.
- Profitability track record (or potential) and healthy financial position (or potential for turnaround).
- Acceptable legal structure and clean legal and tax status.
- Strong potential for growth and development.
- Strong potential for developmental impact.
- Possibility and clarity of exit after no more than five years of disbursement (for both investments and loans.)
Sharakat Investment Fund
“Sharakat” Investment Fund targets a number of vital economic sectors that are crucial to the development of the Palestinian economy,
including the agriculture, industry, tourism, IT, and microfinance sectors. Furthermore, “Sharakat” Fund focuses on certain geographic areas in Palestine including the Jerusalem, and the Dead Sea and Jordan Valley region.
Economic Sectors Targeted by “Sharakat” Fund