Ofeq Social Society Seeks Banking License in Israel

The social society Ofeq has applied to the Bank of Israel for a banking license, aiming to become Israel's first non-profit bank. Established in 2014 as a cooperative credit union, Ofeq has operated as a non-profit entity for over a decade, offering an alternative to commercial banks. If approved, Ofeq would reinvest profits into its members through improved interest rates on deposits, lower fees, and enhanced services, rather than distributing dividends.

This potential approval marks the first banking license granted in Israel in four years, since Ashrai Bank received its license in late 2022. Ofeq's journey to this point has involved overcoming significant hurdles, including accumulating the necessary capital. The organization has attracted approximately 15,000 members who have invested around 20 million shekels, primarily in technological infrastructure.

In March of the previous year, Ofeq merged with 'Agan, a non-profit social credit group with over 30 years of operation, funded mainly by donations. 'Agan provides loans and financial guidance to households, small businesses, and non-profits struggling to secure adequate support from traditional banks. The merger was crucial for Ofeq to meet the capital requirements for banking operations, with 'Agan committing up to 100 million shekels in credit and an immediate 14 million shekel injection.

Ofeq, led by CEO Tom Dromi Hakim and Chairman Yehuda Talmon, plans to serve households, small businesses, and non-profits seeking fair credit terms. 'Agan, headed by CEO Sagi Balsha, aims for an equity capital of approximately 792 million shekels by the end of 2026.

A past challenge for Ofeq involved its collaboration with the loan platform 'Tria'. While Ofeq was not responsible for loan repayments, a liquidity crisis within 'Tria in 2023 made it difficult for some Ofeq members to withdraw their funds, impacting trust and hindering Ofeq's development.