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Source: USAID West Bank & Gaza
20 May 2005



New U.S. Funds for Micro-Finance Project, Up to 20,000 Palestinian Women to Benefit

RAMALLAH, West Bank - The U.S. government Wednesday injected an additional $4.95 million into an emergency program designed to assist an estimated 20,000 Palestinian women working in micro-enterprise activities.

The new funding is part of a $41 million quick impact initiative that the U.S. Agency for International Development (USAID) has launched as a sign of America's commitment to support the democratically-elected Palestinian leadership.

With unemployment straining the capacity of many Palestinian families to cope economically, more and more Palestinian women are seeking ways of earning an income. Faced with strong social resistance to their working outside the home, many of these women are starting their own home-based businesses. About 30% of these micro-enterprise loans go to women working from home.

The project is necessary because most Palestinian women lack access to credit. Many cannot qualify for bank loans and those that do qualify are confronted by a general reluctance among banks to lend to women.

Since 1996, USAID has supported micro-lending to the poorest and most marginalized of Palestinian women. A total of 65,675 loans totaling $30 million have been made by the American-funded program to finance activities in the services sector, trade, production and agriculture.

The average loan size is $427 and the current number of active clients is 3,582, with an outstanding loan value of $3.4 million. The repayment rate for 2004 was 97% demonstrating the viability of the program.

The micro-finance project is implemented by Palestine for Credit & Development (FATEN), an independent Palestinian not-for-profit corporation, in coordination with the Save the Children Federation.

Currently, FATEN has 10 branches in the West Bank and Gaza providing financial services tailored to the needs of women. The new grant will allow FATEN to open branches in Jericho and Tulkarem, two cities with very high demand.

The new funds will also increase FATEN's monthly loan disbursement capacity by 43% (from $560,000 to nearly $800,000). Initially, the project will be able to disburse loans to an additional 11,500 women entrepreneurs. As those clients repay their loans, the funds will be loaned to other women bringing the total number of beneficiaries to an estimated 20,000.

At the request of the Ministry of Social Affairs, FATEN will also provide loans to new vocational school graduates to help them open small, start-up businesses.

FATEN loans support a wide variety of businesses including clothing shops, grocery stores, vegetable shops, raising animals, knitting, sewing and hairdressing.

The American people have spent more than $1.5 billion in the West Bank and Gaza to combat poverty, create jobs, improve education, build roads and water systems, construct and equip medical clinics, and promote good governance.


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