Stakeholders Analysis Report, Schemes and Mind Maps of Microfinance

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Stakeholders Analysis Report

April 2014

Contents

Introduction

Project background

The new Swiss Agency Development Cooperation-SDC funded programme on urban agriculture implemented by OXFAM-Italy (OIT) in partnership with RUAF Foundation (from Netherlands) aims to "To increase income for men and women engaged in small-scale production as well as in food processing/marketing units in urban and peri-urban agriculture in the Gaza Strip through improved capacities and more effective and inclusive market systems". Towards the achievement of the overall objective, the programme builds on a process of facilitating the functioning and improved performance of local and national stakeholders in the urban agriculture market sector. In doing so, it intends to contribute to the achievement of two specific outcomes, namely: i) 1: Capacities and practices of small scale urban and peri-urban agriculture producers (men and women) as well as food processing/marketing unit operators in the selected value chains are improved, leading to improved/increased production, productivity, quality of products, market share and better working conditions, and ii) Training and extension services, policy frameworks and consumer markets function better in selected urban agriculture sectors.

In order to improve the targeting of the programme and to further design the programme together with key stakeholders a stakeholder analysis was implemented as part of the programme’s inception phase. The stakeholder analysis and visioning process have been designed in such a way that facilitates a holistic project planning approach through alignment with the market and value chain analysis of the UPA sector in Gaza Strip; as well as facilitates the setting up and functioning of a Gaza Wide multi-stakeholder Platform on urban and peri-urban agriculture that will have an important role in improving the institutional and policy environment for market oriented urban agriculture development.

Report Structure

This report presents the key findings of the stakeholder analysis process divided into 4 Sections:  the first one, which provides the background and methodology of the assessment;  the second one, which presents the main characteristics of the key stakeholders identified, their mandates, their scale of operations, and their degree of involvement and influence. Embedded in this section there is also a discussion of stakeholders interest and stake in agricultural market development;  the third one, which shows through a table a consolidated stakeholder analysis;  the fourth one, whichfocuses on mapping and analyzing the stakeholders in the agricultural sub-sectors/value chains that have been selected for analysis during the Inception Phase, namely: the fresh vegetables value chain, the cow milk value chain, the olive value chain and the date palm value chain.

I. Background and methodology of the assessment

1.1. Stakeholder analysis in the inception phase and in the program:

methodology and objectives

Within the framework of the project’s inception phase, and in an attempt to engage stakeholders in the project design, including project partners’ selection, the project’s Gaza Local Inception Team (LGT)undertook a participatory mapping and analysis of stakeholders in the agricultural sector in the Gaza Strip. The stakeholder analysis process explored for different actors, inter alia, their tasks, roles, key mandates, power relations, information channels, interest, capacity and influence in supporting pro-poor market development initiatives. The stakeholder analysis is an important input for strategic visioning and planning processes which have started at the inception phase and are planned to continue throughout the project’s life cycle. The specific objectives of the stakeholder analysis were to:  identify all stakeholders in the Gaza Strip;  identify the interests of stakeholders (including their influence on agricultural market development and how they will be affected by it);  categorise stakeholders into for example interest or levels of influence;  identify the level of participation of all stakeholders, with a focus on how the poor engage in the market;  facilitate provision of inputs for the formation of a stakeholders’ engagement groups and fora.

This report aims to document the project’s approach to stakeholder analysis and planning the engagement process, as envisaged in the project’s tender document. This involves identifying stakeholders’ influence on pro-poor agricultural market development and the way they are being affected by agricultural markets, if they are important to engage with and if they are likely to be engaged. This process will feed into actions planned within the framework of the project, namely: pooling best practice; develop stakeholders’ engagement strategy, and develop communication and engagement products.

This report will a) explain what stakeholder analysis is, b) document the methods and tools used to carry it out, c) explain the definitions applied, d) identify stakeholders and their issues, and e) provide a record of what each of them is doing in the sector covered by the project.

The collected information will form part of the planning process for the stakeholders’ engagement in the project and will feed into developing the each project partner’s engagement strategy.

1.2. Working definitions

At the start of the stakeholder analysis we clarified a number of definitions with the project’s Gaza Local Inception Team and external consultants tasked with assessing the various agricultural value chains and designing the project so that all had a common understanding of the terms. The following definitions were agreed to be used in the project:

Community A community group often pursues a common goal, concern or interest on an entirely voluntary basis. It could also mean a municipality, or a system acting as community (serving the same goals

analysis will enable us to identify potential individuals for this group, but it is hoped that the final selection of the group will be self-nominated (that is, the interested individuals will agree amongst themselves on a consensus basis).

One of the first tasks of this group will be to review the stakeholder analysis process, identify any stakeholders not previously included and help develop our understanding of their interests and positions. The process will therefore be iterative and this document will be adapted to the changes revealed by the findings of the analysis and the progress of the mapping. This will be a living document, which will be updated as engagement progresses.

Once the project partners are selected and the project design finalized, the partners will use the stakeholder analysis as an input into developing stakeholder engagement plans detailing the level and scope of engagement of various stakeholders over the Project’s lifecycle.

In line with the Project idea, this participatory assessment of stakeholders aims to provide the G/UPA with a general map of the key stakeholders in the agricultural sector in the Gaza Strip, highlighting their mandates, programs and services, interests in developing the sector, and inter- relations. The LGT will be using this report in a number of workshops planned in the second inception phase of the project to chart out the future trajectory of the Project, based on various scenarios, in line with a long term vision to be agreed upon by all related key actors in Gaza Strip.

The process of data collection and analysis involved a participatory approach of three stages, namely:

 Stage 1- Identifying Stakeholders: Stakeholders include any individual, group or organisation with an interest in the project. We identified an initial broad list of stakeholder groups, and discussed this at an internal workshop of the project team. To help to identify stakeholders, we considered different sectors and interests, such as public, private, community sectors, service providers, business and industry, and NGOs. Specific attention was given to identifying groups that may be under-represented and/or usually do not normally take part in local discussions such as women farmers and share-croppers and landless farmers. The stakeholder identification process categorized stakeholders in three main groups and thirteen sub-groups as follows:

Stakeholder Groups

Government Non-Governmental Organizations

Private Sector Organizations

Sub-Groups Ministerial and Non- Ministerial Institutions

 Local AgriculturalNGOs and CBOs  International NGOs  UN Agencies  Farmers’ Organizations  Local Authorities  Cooperative Associations  Education and Research Organizations

 Private Sector Representative Organizations  Marketing Companies  Input Suppliers  Importers of Fresh Produce

 Stage 2 - Refine Stakeholder List: We selected three criteria for analysis to identify the roles of stakeholders and those most relevant to this project: o Influence - the level of influence they will have on the project now and in the future. o Affected - how they will be affected by the project now and in the future o Interest - what is their current and future interest in pro-poor agricultural market development and how they can engage poor through the local adaptation of the M4P approach

We analysed ‘Influence’ and ‘Affect’ of stakeholders at a workshop for the LGT, and verified the results of with key actors in the agricultural sector in Gaza. We also mapped ‘Interested groups/individuals’ and the stakeholders according to their interest in terms of their current levels of knowledge and engagement and the value to the project that their engagement would bring. Looking at the current levels of knowledge and engagement enables us to identify those stakeholders who will be able to provide most input, but also those stakeholders who we would like to be more involved. This helps us understanding where we need to focus our efforts in involving people through participatory learning and action approach.

 Stage 3 - Capture Information about Stakeholders: This stage involved capturing information about stakeholders and their expectations, which allowed the revision of the stakeholder categorization done in Stage 1. We did this through face-to-face semi-structured interviews with stakeholders identified in the preceding stage. The information capture from these interviews focused on facilitating the categorization of stakeholders according to the following:

o Type: Type of stakeholder, so that stakeholders can be organised into groups or sectors if required. o Scale: It is recorded at what spatial scale the stakeholder operates – National, Regional (Gaza Strip), Sub-regional (governorate level), municipal. o Stake/Interest: A description of the stakeholders' current stake or interest in this project is recorded. o Degree of involvement: This was to support the formulation of a stakeholder engagement process during the implementation of the project, as well as to provide inputs into partners’ selection during the design phase. We have used five levels of involvement to categorize stakeholders:  Inform – provide stakeholders with balanced and objective information to assist them in understanding the problems and market failures the project is trying to address, alternatives, opportunities and/or solutions.  Consult – get stakeholders’ feedback on analysis alternatives and/or decisions.  Involve – work directly with the stakeholders throughout the process to ensure that public’s concerns and aspirations are consistently understood and considered.  Collaborate – Engage stakeholder in the project’s decision making processes, including developing the alternatives and identifying the preferred solution; and further explore partnership potential. This level is not usually included in stakeholders analysis approaches, but is highly relevant to the M4P approach. We felt this was an important level to be included in this project as it describes the level of engagement we will be aiming to with the engagement group.  Decision making – stakeholders make final decision.

II. Profile of Stakeholder Groups

In this section of the report, we present the findings of the stakeholder mapping and analysis in three main sub-sections. The first subsection presents the analysis of governmental stakeholders. The second sub-section presents the analysis of non-governmental, community-based, UN, and semi-governmental organizations, while the third sub-section presents the analysis of private sector organizations.

2.1. Governmental Stakeholders

The authorities in Gaza and the Palestinian Authority in the West Bank have adopted several policies geared towards developing the economic and private sectors, including agriculture, within an overall strategy aiming at promoting economic growth and poverty reduction through private sector and market system improvement. The Governmental stakeholders include ministerial and non-ministerial institutions that have a legal mandate to promote the development, regulate and provide services to the various economic sectors in general and the agricultural sector in particular.

In addition to the Ministry of Agriculture (MoA), which is the lead ministry for agricultural development in the oPt, several other ministries and public bodies play basic roles in the development, regulation and delivery of services to the agricultural sector. These include: Palestinian Water Authority (PWA); Palestinian Environment Quality Authority (PEQA); Ministry of National Economy(MoNE); Ministry of Local Government (MoLG); Ministry of Planning and Administrative Development (MoPAD); Ministry of Finance (MoF); Ministry of Health (MoH); Ministry of Labor (MoL); Ministry of Social Affairs (MoSA); Ministry of Interior (MoI); Governors’; Palestinian Economic Council for Development and Reconstruction (PECDAR); Palestinian Land Authority (PLA); Palestinian Standards Institute (PSI); and Palestinian Investment Promotion Agency (PIPA). These institutions carry out assigned activities from their main offices in either the city of Ramallah or Gaza, as well as through respective branches and directorates throughout the Palestinian territory. Of these, the most important stakeholders for this project are MoA, MoLG, MoNE, MoL, PSI, and MoP.

MoA: Ministry of Agriculture. MoA performs primary duties in the regulation and management of the agricultural sector. It is tasked with oversight, supervision and delivery of certain basic services. In Gaza, MoA has five Agriculture Directorates throughout governorate centers. An identical number of Veterinary Directorates also operate in these five governorates. Several extension units in each of these directorates carry out extension activities in the Gaza Strip. Each guidance unit covers a group of villages and residential compounds. MoA’s actions and services focus on planning; drafting of policies, strategies, laws and regulations; service delivery; implementation of projects; development of natural and agricultural resources; enabling Palestinian farmers to attach to their land; and fighting plant and livestock diseases and pests.

MoLG Ministry of Local Government. MoLG was founded in 1994 as the leading institution in central government on issues related to local administration and development. MoLG is present in every regional capital via its de-concentrated District Directorates (offices). In Gaza, there are five Local Government District Directorates, for each Governorate. MoLG identifies its missions as supporting and promoting the capacities of Local Government Units (municipalities and village councils) and the development of their resources, towards achieving the citizens’ welfare within the framework of the Good Local Governance. The Ministry has identified four strategic objectives for itself: empowering the Local Government Units (LGUs) to build up effective institutional

capacities; promoting the Ministry’s capacities in planning, guidance, and monitoring to better lead the Local Government Sector; promoting democracy, transparency and community participation in the local government sector; and promoting the concept of partnership between LGU’s and the Private and Public Sectors (PPP’s), in order to generate local economic development and to enhance the fiscal autonomy for the LGUs.

The District Directorates (offices) are local branches of the MoLG, representing it within each governorate. In administrative terminology, the directorates are considered part of the local administration but are outside of the local government. They perform administrative functions similar to those of the local branches of any central ministry, including local market regulation, zoning and planning. The authority granted to these branches is delegated and not devolved from the center. Therefore, these district units do not have legislative or judicial powers and are not considered separate from the ministry(as are municipal and village councils). Their existence is important and necessary, however, given that they serve as bridge between the MoLG and LGUs and the local population and communicate to MoLG on issues, needs and wishes of the local people.

MoNE (Ministry of National Economy): MoNE is the leading central government body responsible for private sector regulation and development, including in the agricultural sector. Its mission is to contribute to Palestinian national welfare by creating a highly supportive enabling environment for private sector development; providing a wide range of high-quality services responsive to private sector needs; creating with the private sector a national consensus on economic policy; and expanding global trade relations; like MoA, MoNE are present in every regional capital via its de-concentrated District Offices. In Gaza, MoNE has five District Offices, one in each Governorate.

MoP: MoP is the branch of the Palestinian government that is responsible for cross-sector planning, developing comprehensive development policies with the participation of all relevant Palestinian institutions and to coordinate sector planning in specific ministries, to ensure their consistency with cross-sector approaches and plans, and to lead donor coordination and development of national development plans. The ministry was established in 2003, although it unofficially existed as the former Planning and International Cooperation Ministry. The current ministry has a relatively minor position in Palestinian politics, but plays a significant role in development planning and donor coordination particularly in the West Bank. The MoP Headquarters in Gaza have been operating largely autonomously since the division of 2007, with virtually no communication with the Ramallah Headquarters where all national planning and donors’ coordination is made, including in relation to Gaza. Hence, involvement of MoP in Ramallah in this project may be more important than involving MoP in Gaza.

MoL’s General Directorate of Cooperatives: Since its establishment in the mid-nineties, the General Directorate for Cooperatives has sought to rebuild the Palestinian cooperative system towards a modern and flexible system that can contribute in the social and economic development process^10. Within this context, the general directorate has worked to achieve a set of strategic goals that can be classified as follows:

(^10) Palestinian Labor Ministry, the plan of the General Directorate for Cooperation to confront the challenges facing cooperative work, 1997.

national level (in both the West Bank and Gaza Strip) and are headquartered in Ramallah, with branch offices in Gaza city and satellite offices in various governorates in Gaza and the West Bank. The remaining agricultural NGOs operating in the Gaza Strip can be classified as being of medium and small size, and operate on a relatively limited scale; i.e. at district or sub-district/community level.

All Agricultural NGOs operating in the Gaza Strip, particularly the big NGOs, have adopted objectives related to poverty reduction, food security and empowering Palestinian farmers, particularly small holders and women. Thus, all can be said to have interest in supporting this project’s objectives. Several of them, in fact, have been actively working – for years and through externally financed projects- on improving farmers access to markets and developing their capacities to responding to and meet local and international market needs. The following provides more specific information about the key agricultural NGO Stakeholders in the Gaza Strip:

PARC: ( Palestinian Agricultural Relief Committees)is a Palestinian non-profit, non-governmental organization involved in rural development and women's empowerment. PARC provides advice, awareness support, services, and special consultancies for individuals, groups, and institutions involved in similar domains. PARC relies on the broad and efficient participation of its beneficiaries, and moreover, on developing the qualifications of its experts to better benefit and develop a democratic Palestinian civil society. PARC implements a wide range of programs and interventions, including: extension services/ training, land reclamation, water conservation and reuse, work for the development of household economy activities, particularly with rural women, building the institutional capacity of grassroots and rural CBOs, including supporting the formation of cooperatives, training of new agricultural engineers and vets to raise their skills and capacities to work with rural and agricultural communities on all issues of development of sustainable agricultural and rural development, and creating marketing opportunities for agricultural products through fair trade, value added services, access to finance and export facilitation.

UAWC: Union of Agricultural Works Committees. UAWC works towards fostering a Palestinian society that is food secure, enjoys social justice, holds on its land and lives in a democratic free Palestinian state that enjoys sovereignty over its resources and one where farmers, both male and female, contribute effectively to development. UAWC strategic objectives are immediately aligned with the empowerment and livelihood development of poor farmers and small-holders, with two of its four strategic objectives being small-farmer focused: improving the standards of living for small farmers and strengthening their steadfastness on their lands; and protecting the rights of small farmers and activating their national role.

MAAN is an independent Palestinian development and training institution established in January,1989, registered by law as a non-profit organization. MAAN's work is informed by the necessity of creating independent, self-reliant initiatives that lead to the development of human resources for sustainable development, which incorporate values of self-sufficiency and self- empowerment. MAAN works towards partnering and working hand in hand with Palestinian NGOs, CBOs, committees and grassroots groups in the poorest and most marginalized areas to improve the quality of their lives and empower them to take a lead in developing their communities and achieving self-reliance, steadfastness and sustainable development. MAAN has identified five strategic objectives for itself, namely: to improve the food security situation of the poorest and

most marginalized sectors of the Palestinian society at the family and community level; to develop and enhance the capacities of the Palestinian NGOs, CBOs and grassroots organizations to be able to fulfill their missions and goals so as to contribute to building a Palestinian civil and democratic society based on political pluralism and respect of human rights; to enhance community development and decrease poverty in rural and the most disadvantaged areas; to protect and develop the Palestinian environment; and to raise awareness and advocate for and with the Palestinian community on their national rights at the local, national, and international level. In Gaza, MAAN is pursuing these objectives through five programs: Agricultural and Food Security; Community Development; Women Development; Youth and Adolescent Development; and Environment Protection.

PHG: Palestinian Hydrology Group. PHG is a Palestinian non-government, non-profit organization striving to promote the role of women and civil societies in managing local water and its related environmental resources to ensure transparency good water governance and just and equal provision of water and sanitation services to the rural and marginal communities in the West Bank and Gaza. PHG is also striving to promote water research capacity and infrastructure in Palestine. PHG is seeking local and international networking and partnerships to participate actively in promoting the sustainability and the right based approaches for just allocation of water resources at local, regional and global levels. More specifically, PHG is working towards achieving the following strategic objectives: To promote the adaptation of good local water governance in the water sector in Palestine; to promote the right based approach and ensure equal and just allocation of water to Palestinian communities; to promote gender mainstreaming within the water sector; and to ensure the sustainable management of water and environmental resources in Palestine. PHG’s target group typically include the rural and marginal communities.

ACAD: (Arab Centre for Agricultural Development). ACAD is a Palestinian non- profit non- governmental organization with the aim to encourage micro entrepreneurship in the agricultural sector through small income generating activities among the poor and low-income individuals. ACAD provides financial services concentrating on rural and/ or high poverty rate Palestinian areas that are particularly affected by the difficult political situation. Economic independence and consequently food security for the poor and disadvantaged are ends towards ACAD works to empower individuals and organizations with which it works with the view of activating participation of the poor and marginalized in the economic, social and political spheres of the life in Palestine. In doing so, ACAD is poised to achieve the following strategic objectives: promotion of self-sustaining employment-and income-generating projects in the Palestinian poor and low- income rural and urban communities, with a particular focus on agriculture; expanding geographical access of financial resources; graduating poor and small-scale producers into capital lending markets by shifting the balance of power towards those needing credit; mobilizing saving from the poor; and empowering poor rural and agricultural communities.

WAC : Women Affairs Center. WAC is a an independent and non-profit NGO playing an innovative role in empowering women, advocating women's rights and gender equality in the Palestinian sustainable development process. Within its strategy guided by human rights principles, women economic empowerment, participation, equality, non-discrimination, accountability, justice and dignity, WAC has also developed projects involving women producers

FAO is working to supports junior farmer field and life schools (JFFLSs) that teach agricultural, life and entrepreneurial skills to school girls and boys. Covering everything from how to produce and preserve food to nutrition to business management, the schools aim to instill confidence and self-esteem in young people and develop their potential. FAO also helps farmers’, herders’ and women’s groups to develop or strengthen business plans, avail themselves of services such as microfinance and veterinary care, improve product quality and explore marketing options. Through one program, for example, local women’s associations are earning income by providing in-school feeding to students during JFFLS sessions.

Around 35 organizations meet regularly in the Food Security Cluster which is facilitated by FAO

• including the Palestinian Authority, national and international NGOs and civil society – to agree on needs, priorities, the type and timing of interventions. Both FAO and Oxfam Italia are the co- leaders of the Urban and Peri-Urban Agriculture Working Group under the Food Security Sector.

FAO has been developing project proposals to support to home gardening (particularly important for women-headed households), small-scale aquaculture farming, livestock production in the most marginalized areas and agriculture-based activities specifically targeted for conflict-affected schoolchildren. In order to optimize the use of existing water resources and alleviate water shortages, FAO will focus on the repair of water reservoirs (e.g. irrigation water systems, groundwater wells and rainwater harvesting cisterns) and support best practices in water management.

WFP’s mission in Gaza is to provide food assistance to vulnerable people and to work with local Palestinian authorities to strengthen safety nets and build the capacity of local institutions to anticipate and prepare for emergencies. WFP is implementing two operations to meet the food needs of the most vulnerable and food-insecure non-refugees in urban and rural areas of the Gaza Strip. Both operations use WFP’s purchasing power to support the Palestinian local economy, thereby contributing to the PA’s state-building plan. In 2012, WFP was targeting 285,000 people in the Gaza Strip through food distribution and food voucher programmes. The food voucher intervention allows for a more diversified food basket; beneficiaries can redeem the vouchers in selected shops and are able to pick up fresh and protein- rich food items that cannot be included in conventional food baskets like dairy products and eggs. WFP is very much interested in scaling up the E-Vouchers program, particularly as it has proved to generate considerable secondary economic impacts in the dairy value chain. To this end, WFP is interested in and open to exploring opportunities on how to include fresh produce and other locally produced food items in its voucher program in the future.

2.2.4. Farmers’ Organizations Cooperatives and cooperative unions aside, there are five key non-governmental membership- based organizations that can be said to represent farmers and their interest in the Gaza Strip. These

are: the Palestinian Farmers Union (PFU), Al- Ahleyia Association for the Development of Palm;

the Palestinian Centre for Organic Agriculture, and the Fishermen Syndicate. These organizations

are generally weak in terms of program capacity and outreach, although to varying degrees. They

target specific producers mostly through donors-funded projects, which are often relief and

advocacy focused. While these farmers’ organizations have the mandate of representing farmers’

interests and they have interests in being involved in pro-poor market development and facilitation

initiatives, they lack the capacity to fulfill this mandate. Their participation in the project, however,

is important, particularly since many farmers they represent fall within the target group the project

intends to serve.

2.2.5. Municipalities Municipalities represent the third level of government in the Gaza Strip, and are often referred to as Local Government Units (LGUs). Although geographical boundaries of most LGUs in the Gaza Strip have yet to be defined, we can state that they cover the great majority of the urban areas and the population. There are 25 LGUs in the Gaza Strip, of which 15 are Municipalities, the largest of which is Gaza Municipality, and the others are several other local committees and local councils.

The functions to be carried out by LGUs are specified in the 1997 Local Government Law (LGL) and are listed in the first column of table 3.1. The current laws (in particular the LGL and the Elections for Local Authorities Law) make no distinction between the different types of LGUs1. Thus, all types of councils, from the smallest project committee to the largest municipality, are required to undertake the same functions. In practice, it is only the “municipal” councils that tend to cover the whole range of prescribed functions, and, accordingly, the following discussion relates mainly to the municipalities.

All of these functions are mandatory; the LGU is obliged to undertake the function or at least monitor the situation and provide any of the services that are lacking and are not being provided by another agency. The last category in the table suggests that the mandate given to LGUs is “open ended” (i.e., the LGU could also undertake other functions it deems necessary, or if required by the MoLG). Carrying out most of these functions requires a range of skills, as categorized in the table below. It is notable, however, that ten of the functions require mainly technical skills, while several functions cannot be clearly placed in one of the five skill categories.

(^1) The LGL refers to “local authorities”, which may include municipalities, “local” councils, “village” councils, administrative committees, project committees or other types of councils. None of these terms is defined or explained.

2.2.6. Micro-Finance Institutions (MFI) There are twelve providers of microfinance, eleven nonbanks, mainly NGOs, and one bank that operate in the West Bank and Gaza through about 60 outlets.^2 These institutions provide loans mainly for production, consumption, and home improvements ranging from USD 200-20,000 with an average amount of about USD 1500. Loan terms are from about three months to three years and interest rates vary from about 1-2 percent per month. Some MFIs require nominal compulsory deposits from borrowers but these are not savings instruments as they almost never increase. There is no micro insurance, and agricultural loan products of MFIs remain largely underdeveloped and do not address poor and small-scale farmers needs and particular circumstances. Yet, MFIs are eager to find ways to develop their products to enhance their services to farmers and contribute to agricultural development.

MFIs have managed to be resilient in the face of the marked decline in economic activity since 2000 and occasional severe disruptions on business activity. This required in 2006 some MFIs to allow large scale moratoria or rescheduling of payments by borrowers. The MFIs financial situation improved in the past few years thanks to their efforts in debt collection and to the resuming of PA’s employees salary payment. Portfolio at risk over 30 days in arrears had recorded substantial improvement, from 49 percent of the total loans in 2006 to 24 percent in 2007 (average of 4 MFIs representing 70 percent of the market)^3.

There is a large need for microfinance that is not being met. According to the Microfinance Market Survey in the West Bank and the Gaza Strip , May 2007, there are approximately 25, microfinance clients and they serve perhaps only fifteen percent of the potential market. Funding for MFIs has been mainly grants from donors. The outstanding aggregate loan portfolios of MFIs is around USD 37 million. Donors have provided about USD 30 million in grant funds to MFIs since the mid-1990s. Some MFIs have received low interest loans from donors and alternative funding, including deposit-taking and equity capital is the key to future sustainability.

The key MFIs operating in Gaza are: ACAD, Palestine for Credit and Development (FATEN), the Palestinian Businesswomen’s Association (ASALA), Cooperative Housing Foundation - CHF/Ryada, The Palestine Development Fund (PDF), Reef Finance, YMCA, and UNRWA’s Microfinance Departments and Global Environment Facility (GEF).

ACAD, which is specialized in Micro-Credit and offers Business Support Services to the poor and low- income Palestinian producers. Through the provision of microfinance services, ACAD seeks to promote of self-sustaining employment and income generating projects in the agricultural sector and rural areas, expanding geographical access to financial resources; graduating poor and small rural producers into capital lending markets by shifting the balance of power towards those needing credit and developing and empowering rural marginalized communities.

FATEN (Palestine for Credit and Development). FATEN is a Palestinian non- profit non- governmental organization that seeks to improve the quality of life in Palestine through broad access to microfinance services & micro high-quality and sustainable the pioneer and the

(^2) Palestinian Monetary Authority data. (^3) Value chain reports MoNE& Ministry of Labor

economically active low-income people, especially women, through human resources and technical capabilities developed to contribute to in the empowerment of the family and the development of Palestinian society.

ASALA; the Palestinian Business Women’s Association. ASALA is actively providing loans to women since its establishment in 1997. ASALA’s headquarters is in Ramallah and it hasten strategically located branch offices throughout the West Bank and Gaza Strip. ASALA targets impoverished and excluded Palestinian women in order to empower them and put them on a track that will lead to financial independence and stability. ASALA provides Palestinian women entrepreneurs with a comprehensive package of support including guidance, counseling, training, micro, small, and Islamic financing, and extensive follow up. Success stories are real, tangible, and documented. ASALA, in partnership with women entrepreneurs, is alleviating suffocating and detrimental poverty in Palestine one family at a time.

CHF/Ryada : Cooperative Housing Foundation -CHF is considered one of the first credit programs in the Palestinian territories. The program has worked throughout Gaza since its inception in 1994 with support from the United States Agency for International Development (USAID).Ryada is leader in the provision of responsible financial services in Palestine by: charging sustainable interest rates, maintaining up to date information on successful businesses, investigating demands of loan applicants, building staff capacity and rewarding employees for social impacts. CHF/Ryada has a continuously growing portfolio.

GEF (Global Environment Facility)GEF’s mission is to contribute to the global environment protection. It was created to secure global environmental benefits in biodiversity, climate change, international waters, and ozone layer depletion. It carries out activities to combat land degradation, desertification, and deforestation as they relate to the focal areas.

PDF : Palestinian Development Fund. PDF is a Palestinian non-profit organization established in 1996 to promote the effective growth of the Palestinian projects of small and medium enterprises through the provision of loans, medium-and long-term.

UNRWA ’s microfinance department provides income-generating opportunities for Palestine refugees, as well as other poor or marginal groups who live and work near them. It extends credit and complementary financial services to small-business owners, microenterprise entrepreneurs and households. These investments sustain and create jobs, reduce poverty, and empower our clients, particularly women.

YMCA The East Jerusalem YMCA is a vibrant and integral part of the Palestinian social movement established in 1949. As a member of the World Alliance of YMCAs, the EJ-YMCA is committed to a unique vision of community based on the universal values of human dignity, peace, and justice. Through its microfinance operations, YMCA aims to promote and develop small enterprises to fight poverty and provide employment opportunities for marginalized groups in Palestinian society.

Reef Finance seeks to integrate the Palestinian rural areas in the microfinance services in order to strengthen its developmental role through establishing the first Palestinian Rural Bank. Reef’s objectives are to improve the living conditions of the Palestinian rural population, participate in