The Municipal Development and Lending Fund (MDLF) is a semi-governmental institution , that was created by the Council of Ministers Decree No. 32/36/09 dated October 20, 2005 as an autonomous juridical entity to accelerate Palestine’s drive toward self-sustained, decentralized, prosperous, and creditworthy local government. MDLF carried forward the functions of the Project Coordination Unit and the Project Technical Secretariat (PCU/PTS), previously operating under the auspices of the Ministry of Local Government to support local government units (LGU) as they take increasing responsibility for rising, investing and managing financial resources to provide and expand services.

The main objective of the Fund is to encourage the flow of financial resources from the Palestinian Authority and various donors to the Palestinian local government units LGUs and other local public entities to improve the delivery of local infrastructure and municipal services, to pro-mote economic development, and improve municipal efficiency and accountability.

To serve these objectives, the Fund is mandated to provide municipalities, village councils, local councils, joint services councils, municipally controlled institutions, and local government units with improved financial products and services, and access to capital markets. In addition, the MDLF aims to enhance mobilization of donor assistance, strengthen intergovernmental financial transfers and pro-mote emergency response capacity.