Microfinance Market Survey in the West Bank and the Gaza Strip

This PlaNet Finance survey focuses on the financial needs of Palestinian microentrepreneurs under the ongoing financial and economic crisis. The survey provides information on:

• Palestinian microentrepreneurs and their activities;
• The demand for microfinance lending and non-lending services.

The survey of 1202 microentrepreneurs finds that:

• Palestinian microentrepreneurs lack access to financial services in the West Bank and Gaza strip (WBGS);
• The majority of businesses are in trade activities;
• About half of the microentrepreneurs operate in the informal sector;
• Decrease in profits and difficulties in collecting debts are their main problems;
• Most entrepreneurs respond to the crisis by reducing credit sales or delaying the payments of debts to suppliers.

The survey also finds that:

• The number of potential clients for lending services is 190,000, and the potential market size for microlending services is US $280 million in the WBGS;
• There is a mixed response for the need for credit, with 57% saying they need credit and 27% saying they do not;
• Microentrepreneurs need credit mainly for expanding their businesses, financing assets, working capital requirement and starting up new businesses;
• One-third of the interviewees state a demand for savings products, while insurance products interest one in two microentrepreneurs;
• The potential demand for Islamic loans is high in the WBGS.

The survey concludes with recommendations for microfinance providers, MFIs, donors and regulatory authorities.