Keren Hayesod decided that alongside its investments in national projects, it needed to facilitate private initiative. Already in 1921, Keren Hayesod designated a large part of its income to set up various banks – a mortgage bank, a workers bank, an agricultural bank and more. These banks began to provide immediate assistance to found new settlements and neighborhoods and gave vital loans to establish factories. In 1921, Keren Hayesod founded Israel’s first mortgage bank, the General Mortgage Bank of Palestine Ltd., which helped in the construction of new neighborhoods in Tel Aviv, Haifa, Tiberias and elsewhere. In the mid 1920s, this bank was acquired by the Anglo-Palestine Bank, one of the major banks in the Land of Israel at that time (which later changed its name to Bank Leumi LeIsrael). During the global economic crisis and the collapse of the American stock exchange in 1929, financial systems throughout the world were shaken up. Keren Hayesod agreed to underwrite part of the large deficit of the Anglo-Palestine Bank, and transferred properties and shares to the bank, saving it from bankruptcy. Keren Hayesod continued to help residents through its cooperation with and support for the banking system in the Land of Israel in the years that followed as well.
Photo: The Anglo-Palestine Bank in Tel Aviv (1923)