Capital Market Authority Grants First Seven Licenses to Free Loan Societies Institutions
Israel's Capital Market Authority has granted the first seven licenses to free loan societies (gemach), implementing regulatory guidelines and oversight for.
Jerusalem, 2 September, 2026 (TPS-IL) — The Capital Market, Insurance and Savings Authority announced a further step in implementing the Free Loan Societies Law, granting the first seven licenses to gemilut chasadim (Gemach), or free-loan institutions, that fulfilled regulatory guidelines and licensing requirements.
The authority had previously published regulatory requirements for entities seeking to provide interest-free deposit and credit services, including anti-money laundering measures tailored to the sector and reporting instructions. Alongside granting the licenses, the supervisor began exercising statutory oversight and enforcement powers, issuing hearing letters to entities that fail to comply with legal provisions.
The gemach market represents a unique segment of Israel’s financial system: nonprofit institutions that accept public deposits and extend interest-free loans, typically operating within specific communities and relying on donations, volunteers, and a guarantor-based trust model rather than standard interest-rate mechanisms.