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Shamir Backs Jewish Agency Program to Give Olim Loans Instead of Grants

March 20, 1991
See Original Daily Bulletin From This Date

Prime Minister Yitzhak Shamir threw his weight behind the Jewish Agency’s controversial immigrant loan program at a meeting here Tuesday with Diaspora Jewish leaders, ensuring its place in the overall absorption policy for Soviet olim.

The Jewish Agency for Israel, which gets most of its money from Diaspora donations, came under fire from senior government officials and aliyah activists last month, when it decided to convert its share of the financial aid given arriving Soviet immigrants from outright grants to low-interest loans.

The agency cited a $113 million shortfall in its budget for the nine months between April and December 1991.

Simcha Dinitz, chairman of the Jewish Agency Executive, said Tuesday that the agreement reached with Shamir and Finance Minister Yitzhak Moda’i would enable the immediate implementation of the loan program.

Jewish Agency Treasurer Meir Sheetrit said each immigrant would be entitled to a $1,000 loan repayable over a period of 10 years, starting in the fourth year after receipt of the loan.

The loan would be part of the “absorption basket” of cash and services that Soviet immigrant families receive from the Treasury to help pay for housing and other costs during their first year in the country.

The size of the absorption grant has been cut over the last year as the flood of new immigrants drained Treasury coffers. Last week, Moda’i restored some of the cuts, bringing the subsidy back to its previous level of $7,600 for a family of three, $2,600 of which will now be a loan.

The sum is still considerably below the $9,600 grant originally handed families of three.


Shamir praised the loan program, which is retroactive to March 1, as “an important contribution to the settlement of olim in Israel.”

He said an “unbelievable challenge” faces Israel and the Jewish people, and he urged world Jewry to participate in it.

The Jewish leaders presented the prime minister with an ambitious aliyah financial aid package amounting to $2.5 billion for the 1 million immigrants expected to arrive by the end of 1993.

It is, however, only part of the $4.25 billion the Jewish Agency plans to spend absorbing immigrants over the next four years. About $900 million of the sum will be given as easy-term loans, provided by Israeli banks and guaranteed by Jewish federations in the United States.

In addition to Dinitz and Sheetrit, participants in the meeting with Shamir included Mendel Kaplan, chairman of the Jewish Agency Board of Governors; Marvin Lender, national chairman of the United Jewish Appeal, the principal overseas fund-raising agency in the United States; and Charles Goodman, chairman of the Council of Jewish Federations, the association of Jewish community federations in the United States and Canada.

CJF is holding a special General Assembly of member federations in Washington on April 16 to discuss its participation in the loan program.

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