Google Makes Impact Loan
JERUSALEM, Israel (17/02/2021) Not-for-profit lender The Ogen Group has received a landmark “impact loan” of $1M from Google towards Ogen’s low-interest loans to small businesses throughout Israel. Google’s funds will provide a vital injection of capital to help underserved small business owners launch, rebuild, or expand their activities in light of the COVID-19 crisis. Google is the first international corporate impact investor to support Ogen in this way.
The announcement, made public by Google on February 17, follows a commitment made in 2020 to invest $200 million in NGOs and financial institutions around the world to help provide small businesses with access to capital.
In 2020, Ogen lent almost $50 million to small businesses, low-income households and nonprofits – $20M of which was directed to small businesses. Ogen intends to lend an additional $30M to small businesses in 2021.
In August, in recognition of Ogen’s growth, impact and responsiveness to the needs of small businesses during the coronavirus crisis, Israel’s Ministry of Finance issued Ogen State Guarantees on its loans. In doing so, Ogen became the first not-for-profit lender, and one of very few non-bank lenders, to hold this coveted status. The imprimatur of the State of Israel as a guarantor was a key factor in Google’s decision to commit its support to Ogen.
“I welcome this cooperation between the third sector and a titan from the business sector. Together they have leveraged government apparatus to help small and medium-sized businesses affected since the outbreak of the Coronavirus. Cooperation between the third sector and leading companies has the power to help the many businesses in financial distress due to the pandemic.” Said Professor Avi Simhon, Chairman of the National Economic Council (NEC) and Economic Adviser to the Prime Minister.
“I’m grateful to Google for this show of trust in Ogen’s ability to spark growth for small businesses in Israel and support the economic recovery through our affordable and accessible loans, providing first-class financial access to underserved Israelis,” said Sagi Balasha, CEO of the Ogen Group. “Google’s investment in Ogen shows how business, non-profit and government stakeholders can come together in 2021 to finance social ventures and develop a true impact economy in Israel,” Balasha added.
“Small businesses are the heart of the economy and in the past year we have felt the need to do more for them” says Barak Regev, Google Israel country manager. “We joined Ogen in order to financially help and support more businesses, while continuing our effort to digitize small business in Israel”.
Small businesses, which are the beating heart of Israel’s workforce and economy and generate more than 35% of GDP, have been severely affected by the lockdown measures, losing 44% of revenue on average. Despite government efforts to incentivize the banks to support the small business sector, small businesses actually received 0.6% less bank credit in the last three months of 2020 as compared to 2019, according to Ministry of Finance data.
In addition to financing small business loans through Ogen, Google is granting an additional $500,000 to support the growth of its ShoppingIL Academy initiative, which helps small businesses embrace online sales and marketing. Keren-Shemesh, part of the Ogen Group, will provide long-term mentoring to the small business owners selected to participate in Google’s ShoppingIL Academy initiative.