The volume of frozen loans in Israel decreased significantly following January 2024. In February, the volume dropped to 63 billion shekels, and in March, it further decreased to 54.6 billion shekels. This means that Israelis have resumed payments on 45% of the loans that were previously frozen due to the war. Most of the loans for which payments were resumed are commercial loans.
Of the loans that remain frozen, the majority, totaling 39.3 billion shekels, are mortgages, accounting for 6.7% of total mortgage loans. Additionally, 2.7 billion shekels of consumer loans and 7.3 billion shekels of small business commercial loans are still frozen. The loan freeze program, which has been extended twice, is currently in effect until June.
Israel’s loan freeze program has been successful in providing relief to borrowers affected by the war. However, with the extension of the program until June, it remains uncertain how long this relief will continue to be available to those who need it most. It is important for policymakers to carefully consider their options and develop a plan for addressing this issue as soon as possible to ensure that Israeli borrowers can continue to access credit and support their economic recovery efforts during these challenging times.
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