UNCDF in Palestine
Our work
The United Nations Capital Development Fund (UNCDF), in close collaboration with national authorities and development partners, is catalysing international investment into the Palestinian financial sector and real economy. Through targeted de-risking instruments, investment facilitation, and blended finance structures, UNCDF is laying the foundations for mobilizing new domestic and international capital flows to support MSME-led recovery and strengthen financial system resilience.
In parallel, UNCDF is advancing digital financial services in Gaza, working with payment service providers to expand secure, accessible, and interoperable digital payment solutions under conditions of extreme fragility. Together, these interventions aim to restore confidence, crowd in private capital, and foster a more inclusive, sustainable, and shock-resilient Palestinian economy.
Palestine finance for recovery and resilience
UNCDF, in partnership with UNDP, is leading the Finance for Recovery and Resilience in Palestine joint programme (FRRP), a catalytic platform designed to restore credit flows to viable firms, rebuild confidence in the financial system, and modernize payment infrastructure. With catalytic first-loss capital mobilized from development partners including the government of the Netherlands, and risk-sharing arrangements under structuring with international financial institutions (including PROPARCO), the FRRPP is designed to unlock approximately $110 million in lending over 2025–2027.
Conducting product quality checks at the Hanoer factory located in the Gaza Industrial Estate. Photo: UNDP/PAPP - Shareef Sarhan.
The programme applies structured risk-sharing mechanisms, targeting indicative leverage ratios of approximately 1:4 for banks and 1:3 for microfinance institutions, while prioritizing women- and youth-led MSMEs. The programme aims to unlock more than $200 million in financing for MSMEs, grow the e-payments ecosystem and catalyze international finance to municipal and infrastructure projects. By crowding in domestic and international investors and standardizing market-ready risk-sharing and payment solutions, the FRRPP sets a precedent for resilient, private-sector-led recovery finance in Palestine.
Building resilient payment infrastructure in Palestine
UNCDF works with UNDP and the Palestinian Monetary Authority to sustain regulated digital payment services in Gaza, where banking infrastructure and access to cash are largely limited. With ATMs often inaccessible and physical cash scarce, households and businesses face high transaction costs through informal channels, undermining market activity.
As part of this effort, UNCDF supports PalPay, a subsidiary of the Bank of Palestine, to enable continued digital transactions and economic participation. Through a USD 205,000 catalytic grant, matched by a 40 percent co-investment from PalPay, the initiative expands the use of low-tech, resilient e-wallets and merchant payment solutions designed to function in constrained environments. The intervention combines time-bound financial incentives with regulatory engagement to support rapid adoption among micro and informal enterprises.
Nearly 1,000 merchants have been onboarded, and tens of thousands of digital transactions have been completed, helping to preserve market functionality and enable the continued delivery of cash-based assistance through regulated payment channels.
The partnership also supports ecosystem-level adaptations, including simplified merchant registration using national ID in place of formal business documentation. These measures reduce barriers to entry and facilitate faster onboarding of underserved businesses.By sustaining payment continuity, the PalPay intervention protects livelihoods, supports local trade, and generates transaction data that can inform future financial inclusion and recovery efforts.
Local food stall using PalPay in Gaza. Photo: PalPay.
Shop unboarded by PalPay in Gaza. Photo: PalPay.
Across these initiatives, the United Nations Capital Development Fund continues to deploy innovative finance solutions to drive sustainable development and economic resilience in Palestine.
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Our partners
UNCDF’s work in Palestine is made possible thanks to collaboration with: the Government of Palestine, the Palestine Monetary Authority (PMA), the United Nations Development Programme (UNDP), the Government of the Netherlands, Palestinian financial institutions, local payment service providers, IFIs and MDBs.
Documents
This section brings together key documents related to UNCDF’s work in the country. It includes a curated selection of publications, papers, and reports that reflect the scope of engagement at country level, from programme design to implementation and outcomes.
These documents offer additional context on how initiatives are developed and delivered, and how partnerships contribute to advancing national priorities. They are intended to support transparency, facilitate knowledge sharing and serve as a practical resource for partners, stakeholders and others seeking a deeper understanding of UNCDF’s work.
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Contact us
For inquiries about UNCDF’s work in Palestine, including partnerships, investment opportunities, or ongoing initiatives, please contact: esaa.region@uncdf.org.
