Microfinance in Syria

The instability and violence that have affected Syria since 2011 have seriously disrupted the country’s economy, making microfinance work in Syria increasingly difficult and precarious. To reach out to Palestine refugees, UNRWA completed the mapping survey of Palestine refugees in Syria, which has identified the new areas of the displaced clients and their households and enterprises. As it responded to the crisis, existing loan products terms and conditions were developed and a new loan product of Start-Your-Business (SYB) was introduced to meet the needs of internally displaced Palestine refugees in Syria for covering households and business development needs.

We began lending in Syria in 2003 at a time when there was a great demand for such services and very few other enterprises providing them. By 2012, we provided 30 per cent of all microfinance lending in the country and considered Syria to have the region’s greatest growth potential for microfinance. UNRWA was also the first microfinance programme in the country to reach full operational self-sufficiency.

Despite the current challenges, our microfinance programme remains active in Syria, even establishing new branch offices to increase our outreach. In 2017, UNRWA granted 11,094 loans in the country, worth SYP 1,362 million (US $2.7 million).  Thirty-six per cent of these loans went to women, who have represented a large share of our clients for several years. The portfolio quality is maintained within the international standards with the overall portfolio-at-risk of less than 1 per cent.

While the programme in Syria has increased significantly its outreach capacity in 2017 utilizing the additional US$1.0 million funding from the EU, it is still unable to grow beyond its current scale due to shortage of capital due to losses between 2012 and 2013 when four of its branch offices in the outlying suburbs of Damascus and Aleppo were destroyed or looted and needed to be closed. The current capital of the programme is just over US $1.9 million.  That is significantly below the needs of the programme, which requires additional capital of US $3 million to operate optimally within the current marketplace in four regions of Syria where its branch offices are located.