Palestine Palestine

The State of Palestine comprises the West Bank and the Gaza Strip. Over the past three to four years, Palestinian MFIs have gradually improved their sustainability.

  • Palestine
  • Palestine
  • Palestine

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    03.29.13  | Juliette

    Microfinance in Palestinian Territories

    All microfinance institutions in Palestine, work under an organization named Sharakeh. It was formed in 2002 and functions as a voluntary coordinating body that speaks for non-profitable and non-governmental microfinance institutions in this country. Their aim is to provide financial services and loans to small businesses. Through this network, demand for micro credit has known a rise in the past years.

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    Microfinance for democracy in the Middle East

    Although China has embraced capitalism without giving up the single-party system, the idea persists, especially within the American government, that the market economy and doing business can help strengthen democracy. The US federal agency OPIC (Overseas Private Investment Corporation) walks the talk by announcing a loan guarantee programme and loan financing to small businesses in Jordan and Egypt. Both countries’ local banks will share $ 500 million in loan guarantees.

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Economic and social context

The State of Palestine comprises the West Bank and the Gaza Strip. Since 1917, the territory has been affected by conflicts; its borders and economy are now controlled almost entirely by Israeli administration. The politician and security situation of Palestine Territories asphyxiates the economy which remains dependent on a foreign aid lifeline.

The Palestinian Authority is making significant efforts to develop the country and reduce poverty. By 2013, the National Development defines two challenges: reduction of the poverty national rate from the current 22% to 13% and of the food insecure rate from 33% to 27%. The achievement of the Millenium Development Goals is not guaranteed for all indicators, but progress has been made on several of them.


In 1922, after the collapse of the Ottoman Empire that ruled Greater Syria for four centuries (1517-1917), the British Mandate for Palestine was established. In 1947, the United Nations Partition Plan proposed a division of Mandate Palestine between an Arab and a Jewish state, with Jerusalem and under a special international regime. This Partition Plan was accepted by the Jewish leadership but refused by Arab leaders.

The day before the end of British Mandate, Israel declared its independence within the borders of set out in the Partition Plan. Since it, there has been constant unrest, including major wars in 1948 (Arab-Israeli War) 1967 (6 days war) and 1970 (black September). The Palestinian retaliation has been in two civil disobedience movements, called the First Intifadah (1987-93) and the Al Aqsa Intifadah (2000- 2004), marked by stone throwing, suicide bombings and rocket attacks, eliciting renewed aggression from the Israeli Defence Forces. The most recent incident was Israeli airstrikes on Gaza, in January 2009. Over 5 million Palestinians have emigrated since 1917, while Israel continues to build settlements around Jerusalem, encroaching on Arab land.

In 2011, Palestine was granted member in the UNESCO. In 2012, it was upgrade by UN General Assembly from an observer entity to a non member observer state within the United Nations system, and implicitly recognizing PLO’s sovereignty.

Culture in Palestine

The Palestinian nation has about 10 million people and has a large Diaspora. Only 3.7 million live in the "Palestinian territories". The Palestinian population is largely Sunni Muslim with a small Christian minority community and Samaritans. Arabic is the official language but Hebrew and English are widely spoken.

Palestinian culture is closely related to those of the nearby Levantine countries such as Lebanon, Syria, and Jordan, and the Arab World. Cultural contributions to the fields of arts, literature, music, costume and cuisine express the distinctiveness of the Palestinian experience, and flourish despite the geographical separation between Palestinian territories, Israel and the Diaspora.

Microfinance in Palestine

With only 19,6 % of the potential microfinance market covered and almost 50% of Palestinians in the West Bank and Gaza living below the poverty line, the demand for microfinance services remains strong. Large parts of the Palestinian economy suffers from Israel’s strict policies regarding both men and goods transportation. With regards to the subsequent high unemployment rate, many Palestinians have turned to self-employment activities, thus boosting demand for microfinance services. According to estimates, between 150,000 and 190,000 households need a microcredit, and additional 96,000 need SME credit and a further 200,000 need small-balance savings accounts and money transfer services. There are 10 providers of microfinance services: one bank (Al Rafah Bank) and 9 MFIs with various legal structures.

Over the past three to four years, Palestinian MFIs have gradually improved their sustainability.

State of Palestine
Dawlat Filastin
Etat de Palestine (French)


Coat of arms

Anthem: Biladi, Biladi

Location of Palestine
Location of Palestine


Jerusalem (proclaimed), Ramallah (administrative)

Official language(s)



De jure parliamentary democracy operating de facto as a semi-presidential system



Mahmoud Abbas


Speaker of Parliament

Salim Zanoun



National Council

Sovereignity disputed with Israel

 -  Declaration of Independence 15 November 1988 
 -  UNGA observer state resolution 29 November 2012 
 -  Statehood not in effect 


 -  total 6,220 km2
2,400 sq mi 


 -  2010 estimate 4,260,636[4] 


2008 estimate
 -  Total $11.95 billion

Per capita



Israeli shekel(ILS)

Time zone


Drives on the


Calling code


Internet TLD




The Arab Center for Agricultural Development (ACAD) is a Microfinance Institution (IMF) based in Palestine providing financial services concentrating on rural and/ or high poverty rate Palestinian areas. ACAD has currently 8 regional offices in West Bank and Gaza; the headquarter is located in Ramallah city. It currently serves 3282 clients.


To give access to microfinance services for all in Palestine


To provide sustainable efficient financial services to women and poor families, mainly in rural areas, in order to contribute to poverty alleviation and economic development of Palestine.

Goals & Objectives

  • Promotion of Self-sustaining employment-and income-generating projects in the Palestinian poor and low-income rural and urban communities
  • Expanding geographical access of financial resources
  • Graduating poor and small-scale producers into capital lending Markets
  • Help cooperatives mobilizing savings
  • Empowering poor communities
  • History

    The Arab Centre for Agriculture Development (ACAD) started activities in 1988 as a for-profit company called UAC (United Agricultural Company). It was dedicated to providing loans to the agricultural communities of the Jordan Valley and was launched in four rural agricultural areas. From 1993 to 1995, UAC assets were transferred to ACAD, a newly created Palestinian NGO that was registered in Jerusalem in 1993 and registered with the Palestinian National Authority (PNA) in 2001. Based in Ramallah, ACAD expanded to cover the entire West Bank and Gaza Strip and has managed to evolve from a purely agricultural institution to a Microfinance Institution (MFI).


    ACAD has 9 offices - in Gaza, Bethlehem, Jenin, Al-Bureh, Tulkarem, Jericho, Ramallah, Hebron and Tubas – and 47 employees. So far, ACAD has served 11,483 persons, more than 66 cooperatives, with more than $ 25 252 465, 77 lent.

    Clients and Vision

    ACAD’s differentiation is its strong relationship with the client, which is determined by customer focus, respect for client culture and valued staff relationships. About 70% of the company’s clients are women. The company has set guidelines that limit its consumer lending to only 10% of its portfolio, which is another source of differentiation in Palestine. By 2015, ACAD plans to expand its portfolio to reach more than 8,000 active clients with a outstanding loan portfolio of approximately 8 million us dollars.

    Know more about ACAD : ACAD website

    Key figures - March 2013
    Legal status Licensed MFI
    Number of borrowers 3,282
    Gross Loan Portfolio $6,368,726
    Average loan oustanding $1491
    Average interest rate 1.91% per month
    Number of personnel 41
    PAR (Portfolio at Risk) 8,70%



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