Wishor Enters Entrepreneur and Contractor Financing Amidst Sluggish Housing Market
Translated & summarized from Bizportal by baba
Wishor Globaltech Group has launched a new non-bank credit division, Wishor Finance, targeting real estate developers and contractors with loans and guarantees. This expansion into the credit market occurs during a significant downturn in Israel's housing sales, potentially increasing risks for developers financing unsold inventory. The move also follows a Supreme Court ruling that could raise credit costs for developers. Wishor Finance aims to provide an alternative to bank financing, which is constrained by regulatory limits on real estate exposure.
The story in 6 lines · by baba
- Wishor Globaltech Group launched a new non-bank credit division, Wishor Finance, to fund developers and contractors.
- The division offers loans for property acquisition, existing assets, and unsold housing inventory.
- This move occurs amidst a severe slowdown in the Israeli housing market, with low sales volumes.
- A recent Supreme Court ruling may increase the cost of credit for developers.
- Wishor Finance has obtained expanded credit provision and guarantee issuance licenses.
- The group's total profit in Q2 was approximately NIS 72 million, with a 21% annual return on equity.
Wishor Globaltech Group, the controlling shareholder of Ayalon Insurance, is expanding into non-bank credit, primarily targeting real estate developers and contractors. Its subsidiary, Wishor Finance, has secured an expanded credit provision license and a separate guarantee issuance license from the Capital Markets Authority. The company has already provided initial loans and guarantees, though the total volume has not been disclosed. The new services include financing for land and income-producing property acquisition, loans against existing assets, and financing for unsold housing inventory, which allows developers to free up equity for new projects. Wishor Finance will also consider second-lien mortgages, where another lender has priority in case of asset seizure. Beyond real estate, the division plans to serve medium-sized and public companies in commerce, industry, and services. The guarantee license is aimed at construction companies and infrastructure contractors needing bid, performance, and quality guarantees, as well as those for advance payments, suppliers, betterment levies, and permits. Non-bank guarantees do not count against a company's bank credit line, leaving it available for construction financing, and have less stringent capital and liquidity requirements than bank guarantees.
The move comes as the Israeli housing market experiences a significant slowdown, with August sales at a low point and developers offering extended buyer incentives. This prolonged sales cycle ties up developers' capital in projects, making financing for unsold inventory particularly vulnerable. Furthermore, a recent Supreme Court ruling in the Kushkuro case may increase the cost of credit for developers, especially for weaker projects, by prioritizing buyers' delay compensation over lenders' rights in certain insolvency scenarios.
The new division will be led by Sivan Rahamim, formerly deputy CEO of guarantees at Phoenix Gama, and Yuval Finkel, who previously managed the state's credit fund. Nitzan Tsa'ir Harim, CEO of Wishor Globaltech, stated the expansion is part of the group's strategy to move beyond insurance. Wishor Globaltech, founded by Tsa'ir Harim and Emil Weinshall, entered the stock exchange in 2021 and is currently valued at approximately NIS 2.3 billion. The group's total profit in the second quarter was around NIS 72 million, with an annual return on equity of about 21%. This credit division launch coincides with other group expansions, including acquiring a controlling stake in Altshuler Shaham and entering the pension and long-term care insurance sectors.