Menora ERN Launches Direct Consumer Loans to Compete with Banks
Translated & summarized from Bizportal by baba
Menora ERN is launching direct consumer loans for households and small businesses, aiming to become a major credit provider in Israel. The company, now fully controlled by Menora Mivtachim, will compete directly with banks and credit card companies. This move expands Menora's credit portfolio, which grew significantly in 2025 and early 2026. Leveraging its extensive transaction data, Menora ERN seeks to capitalize on the growing non-bank lending market, while managing increased credit risk.
The story in 5 lines · by baba
- Menora ERN is launching direct loans for households and small businesses in Israel.
- The company aims to become a leading credit provider within three years.
- Yaron Gil, formerly of Bank Leumi, joins as consumer credit vice president.
- Menora ERN will directly compete with banks and credit card companies.
- The move leverages Menora's extensive transaction data and expands its credit portfolio.
Menora Mivtachim is expanding its credit operations with Menora ERN entering the direct lending market for households and small to medium-sized businesses. The company will offer loans for any purpose, a move that includes the appointment of Yaron Gil, formerly deputy head of retail banking at Bank Leumi, as its consumer credit vice president. Menora ERN aims to become a leading credit provider in Israel for households and businesses within three years. The company currently operates in approximately 16,000 businesses, with outstanding commitments of about 6 billion shekels and a credit portfolio of 2.5 billion shekels for private clients and businesses, including point-of-sale and auto financing.
The significant change is the sales channel. Instead of financing specific purchases like cars or furniture, Menora ERN will now directly approach consumers to offer standalone loans. This strategy broadens the target market and increases the credit segment's weight within the Menora group. The group's overall credit portfolio grew by 43% in 2025 to about 8.3 billion shekels, with credit segment profits rising 35% to 183 million shekels. By the first quarter of 2026, the portfolio neared 9 billion shekels.
Menora's full control of ERN, acquired in 2025 for 230 million shekels from the Natanzon family, is part of this strategy. This acquisition valued ERN at 770 million shekels and consolidated the operation entirely within Menora. The move into direct consumer credit places Menora ERN in direct competition with banks, credit card companies, and non-bank credit institutions in an increasingly competitive market. Credit card companies, for instance, saw their consumer credit grow by 8.1% in 2025, outpacing bank credit growth, and increased their market share from 12% in 2019 to 18% by late 2025.
The interest rate environment has also favored non-bank lenders, with Bank of Israel research indicating a shift of consumer credit from banks to these entities during periods of rising interest rates. Menora ERN's advantage lies in its extensive data on transactions and payments across thousands of businesses, which can be leveraged for underwriting, pricing, and marketing. The company's data shows an increase in household spending, with average check transactions rising 23% year-over-year to 3,241 shekels in June, and average direct debit transactions reaching 12,900 shekels. This direct lending approach offers potential for higher interest income but also exposes Menora to increased household credit risk, making underwriting quality crucial for future profitability.
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