An official body funded by state coffers has for years been providing loans to settlers who were setting up illegal outposts in the West Bank, the Haaretz daily newspaper reported Monday.

Documents showed the World Zionist Organization’s Settlement Division gave out dozens of loans over the past 20 years. It also helped settlers obtain loans from banks by backing their claims that they either owned the land or had permission to be there, even when they didn’t, the report said, citing two sources from different banks who were familiar with the activities.

Banks are not supposed to give loans to set up outposts as they are illegal. Thus, before granting a loan to settlers the banks check with the Settlement Division regarding the circumstances of the request, the sources said.

Get The Times of Israel's Daily Edition by email and never miss our top stories Free Sign Up

The documents showed that from the mid-1990s onward, the Settlement Division provided mortgage loans for 26 outposts, including Amona, which was evacuated and razed in February 2017 after the High Court of Justice deemed it to have been built on private Palestinian land.

Settlers often provided agricultural equipment or sheep as collateral for the money, which, according to the report, was then apparently used to establish unauthorized outposts.

The Settlement Division refused to comment on the report, Haaretz said.

In some cases the money was used for illegal construction inside settlements. In 2014 a loan was given to set up a flour mill in the northern West Bank settlement of Yitzhar, despite the fact that three demolition orders had already been issued for structures in the area where the mill was located.

The Settlement Division does not have access to the confidential land registry in the West Bank held by the Civil Administration, according to the report.

Some settlers build outposts beyond the confines of established settlements as a way of expanding Jewish hold on territory and in the hope that the posts will eventually become approved. Efforts by authorities to remove the illegal outposts are often met with violent resistance by the residents and their supporters.

Under the so-called Regulation Law, which has been stuck in High Court proceedings since being passed in February 2017, the state may retroactively expropriate land that has an identified owner if settlers built there in good faith or with government support. The Palestinian owner is then compensated for the land.

Haaretz based its findings on comparisons of Civil Administration maps against the names of those who received loans and their home addresses, the time period when they received the loans and the land involved, gleaned from the Justice Ministry’s Mortgage Registry. It found that the Settlement Division repeatedly gave loans to those who at the time were actively setting up outposts.

The mortgage registry has details of the date and collateral involved in each loan, but the sums involved are classified to protect the privacy of those receiving the loans. As a result, the report did not include the amounts given in any of the loans.

In most cases the collateral used to secure the loans was property connected to activities at the outposts such as herds, sheds or agricultural equipment.

The World Zionist Organization is an international body founded more than a century ago that promotes Jewish education and immigration to Israel. It serves as an umbrella group for a host of international Jewish groups and youth movements.

For nearly half a century, its state-funded Settlement Division has played a key role in managing land and infrastructure. The group’s stated aim is to create and support rural communities in the West Bank, the Golan Heights and the rest of Israel.

In December 2015 the Knesset passed a legislation anchoring in law the status of the Settlement Division as a recognized arm of the government with the power — subject to government oversight — to fund and develop rural Jewish communities both within and over the Green Line.

Opposition lawmakers claimed it aimed to deceive the US and channel funds to illegal settlement outposts in the West Bank.

Times of Israel staff contributed to this report.