17 October 2007 Microloans Help Businesses Expand in Palestinian Territories, October 17, 2007
(Agribusinesses also expanding in some areas)
By Kathryn McConnell
USINFO Staff Writer
Washington -- Receiving a series of small loans, a woman living in Beit Jalla on the West Bank was able to expand her sewing business from a sole-person, home-based operation into a thriving venture employing up to 10 seamstresses and bringing more income to her family.
The borrower’s loans were among the 72,000 made by local lender FATEN (Palestine for Credit and Development) with a total value of approximately $43 million. FATEN has disbursed microfinance loans to entrepreneurs, mostly women, in the West Bank and Gaza since 1995. FATEN is now independent, thanks to a $15 million investment from the U.S. Agency for International Development (USAID) and nurturing by the international nonprofit group Save the Children.
USAID's current efforts to support the economic development of the Palestinian Territories are focused on a microcredit organization known as SMART (Small and Microfinance Activity for Recovery and Transition).
Begun in 2006, SMART is operated in cooperation with the U.S.-based nonprofit organizations ACDI/VOCA and Academy for Educational Development (AED). By providing training, the program aims to preserve the economic institutional infrastructure in the territories and improve access to financial services by low-income entrepreneurs, according to USAID's Adnan Joulani.
USAID also has assisted the development of partnerships in agribusiness, a critical part of the economy, said USAID West Bank/Gaza Mission Director Howard Sumka.
The Palestinian Agribusiness Partnership Activity, started in 2005, is rehabilitating traditional agribusinesses and supporting nontraditional ones by providing financial assistance and training to farmers and by promoting improvements in food production, food quality, food safety and consumer availability of food products.
The program provided $1 million to finance the modernization of greenhouses on the northern West Bank to grow herbs and spices for export. Sales of those products, mostly to Europe, are helping to support 170 farmers, Sumka said.
Another new greenhouse funded by USAID is being used to grow high-quality potatoes, which are exported through Jordan for shipment to other countries.
By giving farmers the technology to produce the potatoes and joining farmers with food processors, the USAID West Bank/Gaza Mission has "been able to ensure their high-quality product will be very quickly marketed into an area where there is high demand for it," Sumka said.
U.S. economic assistance to West Bank and Gaza has come in other forms.
A $228 million Middle East Investment Initiative (MEII) loan fund launched in July is a collaboration among the U.S. Overseas Private Investment Corporation (OPIC), the U.S.-based nongovernmental organization Aspen Institute and the Palestine Investment Fund.
The initiative aims to provide low-cost loans to small and medium-sized businesses that otherwise might not have access to investment capital. The funding from the Aspen Institute is raised from donors in the United States, Europe and Arab countries. The Norwegian government contributes $5 million for the fund’s operating costs.
The program "will infuse much needed investment funds into the Palestinian business sector allowing even small business owners to use their own talents and energy to improve conditions for themselves and their families," said OPIC President Robert Mosbacher at the launch of the fund in Jerusalem.
Other assistance takes a more personal form.
Yvonne Davis of Connecticut is a trainer and motivational speaker who speaks professionally about business practices. She recently participated in a U.S.-sponsored program that allowed her to share her marketing expertise with women and men entrepreneurs in the West Bank through seminars and one-on-one advice sessions.
Davis remains in contact with several seminar participants. Through e-mail, they ask her to review the soundness of their business plans and seek answers to other business operations and personal living questions, Davis said.
In fiscal year 2007, USAID invested $50 million in Gaza and the West Bank. The Bush administration has requested an increase to $77 million for the next fiscal year, Sumka said.