Background

The microfinance department grew out of one of the most difficult microfinance environments in the world, overshadowed by decades of occupation and unique restrictions on enterprise and trade.

It began operating in Gaza in 1991, when an Israeli closure of the Gaza Strip sharply curtailed local access to the Israeli labour market. Resulting hardships were exacerbated by a fall in Palestinian remittances from the Arab Gulf following that year’s Iraq war.

To bolster local employment, UNRWA provided credit to small and medium-scale businesses, working with an initial capital fund of USD 407,000.

Since then the department has become one of the largest microcredit institution in the West Bank and Gaza, and a uniquely positioned regional microfinance organisation.

Supporting women

Empowering women, who face additional difficulties as entrepreneurs, has been an integral part of our work. Thirty-seven per cent of our loans have financed women micro-entrepreneurs.

Supporting youth

Youth throughout the region face higher rates of unemployment than adults and often wait long periods after leaving school and finishing university before finding a job. UNRWA works to end such marginalisation by providing finance to support enterprises run by young men and women. Thirty-one per cent of our loans have financed young people aged between 18-30 years old.

Expansion

The department has also worked in Jordan and Syria since 2003. We are expanding rapidly in these markets, which are soon expected to outstrip our Palestinian operations.

In the West Bank and Gaza, micro-enterprises make up 90 per cent of all enterprises. Such enterprises are also predominant in Jordan and Syria.

As of 2011, the department has provided nearly 266,000 loans valued at USD 302 million. In any given year, the ratio of refugee clients ranges from 20 – 86 per cent in different fields.

Range of services

The department has considerably diversified its services to help clients cope with persistent economic volatility by introducing loans for:

• micro-enterprises employing fewer than five workers 
• basic household costs, including education and health 
• housing, for refugees with no access to mortgages
• start-up enterprises for youth