Women, Microfinance and the Middle East

By Mohammed Al-Shawaf, KF9 Palestine   Kawthar Picture 1 Thaera

Secretary of State Hillary Clinton states that “microenterpise is uniquely designed to empower women…”  The New York Times columnist Nicholas Kristof calls the oppression of women worldwide the “human rights cause of our time” and encourages people who want to get involved to (among other things) lend to a woman entrepreneur on Kiva.

These are weighty observations from important people.  But how do these bold statements translate in a region of the world historically disparaged for the role of women in its society?

The second microfinance institution (MFI) of my fellowship, FATEN, is well positioned to help me answer these questions.  When FATEN began in 1994, it lent exclusively to women and although it has since expanded to include male borrowers, 92% of its client base remains female. 

In the past week I’ve visited two success stories, but even still, the two female borrowers demonstrate the nuanced relationship between microfinance and women in Palestine  

If you didn’t know better, Kawthar seems like a woman that deserves our pity. Adorned with a headscarf and working in Deheisha Refugee Camp in Bethlehem, she speaks about her husband (a daily worker in Israel) being away for weeks or months at a time working an unsteady and often dangerous job. 

But look deeper and that first impression is wiped away as soon as Kawthar talks about herself and her business.  She may work in a refugee camp, but she doesn’t live there.  In fact, Kawthar moved her clothing store from her house to Deheisha because she recognized a fantastic opportunity: a large market for her products and regular foot traffic around the store.  When I met her, she had just recognized her next opportunity: a health and beauty store she had recently opened in Bethlehem city.  That business is where her real passion is and she’s hoping to hire an employee at the clothing store so she can spend more time nurturing the new project.

When I asked her about her role in the household since receiving loans from FATEN (this was her fourth), she pointed to the fact that 90% of their family’s income now came from her.  She also said that the lack of her husband’s regular presence in the home meant that she was now the “husband and wife for the family” and everyone knew it.

Kawthar’s story reminded me of a new study by the Palestinian Women’s Research & Development Center, UNESCO and the Ministry of Women’s Affairs that interviewed over 300 women including 139 women-run businesses as well as employees at MFIs and various women and community groups.  The purpose of this first-of-its-kind study was to assess the qualitative impact of microcredit on Palestinian women.  Among its findings, 55.4% of the businesses surveyed became the primary source of income, the loans were said to contribute to the economic empowerment of women, improve the woman’s ability to participate in household decision making and contribute towards reducing gender based violence (although not in Gaza, where microloans were found to have the opposite effect).

If Kawthar is the model Palestinian female borrower and an individual that most embodies Hillary Clinton and Nicholas Kristof’s vision of microfinance’s impact on women, Thaera, the second female borrower I visited, would be a much tougher sell.

Thaera and Kawthar have much in common—they are both repeat FATEN borrowers and both of their husbands are daily workers in Israel.  Thaera’s husband Ahmed, though, has not had a permit to work in Israel since the Second Intifada in 2000 and the last time he tried to enter Israel to work, he was arrested for ten months.  Ahmed is the sole breadwinner for the family and when he was arrested, Thaera realized that she had to take action.

This is usually the point in the story where you might hear how Thaera started her own business (or expanded an existing small-scale project) and turned her husband’s misfortunes into an inspiring opportunity. But instead, when Thaera went to FATEN for a start-up business loan, it wasn’t for her business, it was for her husband’s.  Thaera knew that her family’s livelihood depended on her husband having a steady income so she took out a loan in her name and gave it to him to start a small auto shop.   So when the family’s economic prospects improved as a result of the loan (which they did), who was responsible for the transformation?

Although 92% of FATEN’s loans go to women, it would be misleading to think that that statistic speaks to the prevalence of women-owned businesses in Palestine.  There is no data on how this 92% breaks down, but Thaera’s case is not an isolated incident.  At the same time, there are still many  “Kawthar”s to be found.  Additionally, family loans where the husband and wife work together in the business, are also common.   

Why then are all of these loans in women’s names?  Operations Manager Fawz Abu-Hijleh says that FATEN prefers to give the loan in Thaera’s name instead of her husband’s because the social pressure for her to repay the loan is stronger.  From a legal perspective, FATEN is also much likelier to recoup the loan if there are severe repayment problems because the woman’s family wouldn’t allow her name to be defamed.  

As I mentioned in my last post, when you dive into the details, it’s bound to get complicated, even inconvenient. 

But there’s one similarity that makes me challenge whether Kawthar, the enterprising shopkeeper, should be any more of a model of “women empowerment through microfinance” than Thaera, the stay-at-home mother with the foresight to walk into the FATEN office when the family was in trouble.  When Thaera was in her home in Qalqilyah talking about the effect her FATEN loans have had on her family, I couldn’t help but notice the seemingly permanent smile on her face.  It was indistinguishable from Kawthar’s.


18 Members to go to reach goal of 100 by year’s end!  Join the Palestine lending team now!

Follow Mohammed’s experiences in Palestine on Twitter @moshawaf

Mohammed Al-Shawaf is the first Kiva Fellow with Ryada and FATEN, two field partners based in Ramallah (West Bank).


About the author