As of 2024, there were 685 thousand businesses in Israel, 99.5% of which were SMEs (i.e., companies employing up to 100 workers). In an average year, 55 000-60 000 businesses are registered and about 40 000 closed down formally. In 2024, 61 000 new companies were established and 48 000 were closed. Removal of government support measures might result in many enterprises shutting down in the post-crisis period.
From 2023 to 2024, interest rates for SMEs decreased, while the interest rate for large firms increased. The average interest rate for SMEs decreased from 7.31% to 7.1%, while the interest rates for large firms rose from 5.81% to 6.09%. Furthermore, the interest rate spread narrowed from 1.5% to 1.01%.
In 2024, Israeli banks provided NIS 365.96 billion in credit to SMEs, an increase of 6.04% compared to 2023 (NIS 345.1 billion). The share of SMEs in the credit granted by the banks was 44.21% of total business credit, representing a decrease compared to the previous year which registered a share of 45.89%. This is an even further decline compared to 2022, when it stood at 49.45%. This continues an ongoing decline that has persisted since 2017, when the share peaked at 59.88%. In total, between 2010 and 2024, nominal bank credit to SMEs grew by 74%.
In 2024, total venture capital investment in Israel reached USD 9.6 billion, representing a 39% increase over the USD 6.9 billion raised in 2023, and a 15% rise in the number of reported deals to 453. The total number of known deals for 2024 was 694, but IVC estimates that between 1 000 and 1 100 transactions were completed during the year. Despite the backdrop of war and global macroeconomic challenges, the Israeli high-tech sector saw renewed momentum, with Q4 2024 marking the strongest quarter of the year with 122 reported rounds, including five mega deals that accounted for 36% of the capital raised that quarter.
SME and entrepreneurship policies in Israel are primarily designed by the Ministry of Economy and Industry and implemented by the Israel Innovation Authority (IIA) and the Small and Medium Business Agency (SMBA). While the IIA (formerly known as the Chief Science Office) focuses on leading technology-based start-ups and SMEs, the SMBA caters to all SMEs in Israel’s main economic sectors through business management training and coaching, subsidized access to finance (for example, through the national loan guarantee program) and the work of the business development centres (MAOF centres).