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Reaching the Unreachable

UNRWA’s Microfinance Programme in Palestine

Courtesy of UNRWA Palestine

Through the provision of financial services for the low-income and working poor, microfinance lending services are considered to be an efficient tool that assists target groups to rely on themselves economically in order to generate income and improve the livelihoods of their families. These services further assist marginalized groups to emerge from poverty to become economically active and self-sustaining individuals and households. For these reasons, UNRWA established its Microfinance Programme in Gaza in 1991, extending it to the West Bank in 1994, and to Jordan and Syria in 2003. It aims to improve the quality of life of small-business owners, micro-entrepreneurs, and poor households through the provision of credit and other financial services that sustain jobs, decrease unemployment, reduce poverty, economically empower women and youth, and provide income-generating and asset-building opportunities to Palestine refugees and other proximate poor and marginalized groups. In practical terms, the program offers inclusive financial services through several loan products that meet a diverse range of client needs. Such needs are being addressed through the business support loan products (helping clients to generate income to enhance their self-reliance) and/or through the nonbusiness support loan products (helping marginalized groups earn incomes) that improve the living conditions of households and their quality of life.

Currently, the program offers nine loan products that cover costs related to running a business, housing improvement, and various personal needs. They help improve access to better education and health care while ensuring families’ prosperity and allowing them to overcome any unanticipated economic shocks they may encounter. Such loan products also target Palestine refugees, women, and youth, as well as the owners of micro-enterprises that work in the informal sector of the economy, such as street peddlers and women-owned projects.

From its establishment in 1991 until June 2022, UNRWA’s Microfinance Programme has issued almost 616,172 loans valued at $656,956,898 in its entire area of operation that covers the West Bank, Gaza, Jordan, and Syria. The Microfinance Programmes in the West Bank and Gaza have been managed by 11 branch offices that retailed half of these loans (306,352 loans) and 63 percent (US$417,085,145) of all invested amounts. Of these investments, 44 percent have supported women’s businesses, improving the quality of life of target groups.

As the UNRWA Microfinance Programme is committed to maintaining service continuity to its target groups, especially during difficult times, it was the only microfinance program that continued to provide lending services, especially in Gaza after 2006 and in Syria after 2011. The program adopts the microfinance industry’s best practices, which have been certified through a global microfinance rating agency. In 2017, the program received the grade of A+ by MicroFinanza Rating and was granted the “Leader Milestone” for its near-perfect adherence to the three Pro-Poor Principles by Truelift. Such ratings placed the program first among microfinance programs in the MENA region and fifth worldwide.

Joseph Al-Atrash is 23 years old and lives with his family of three members in Beit Sahour in the West Bank. His workshop, where he repairs and leases industrial equipment, is a unique business in the area. “Since I started borrowing from UNRWA in 2015, I have received three loans to develop my workshop and have increased my business investment from $10,000 to $25,000. In addition, my monthly income enabled me to build a house, get married, and buy a car for my family.

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