” After weeks of headline news about the Arab Spring, we seem to have forgotten the man who started it all: Mohamed Bouazizi, the [26 year old] Tunisian fruit vendor who set himself on fire after police confiscated his small cart. It was Mr. Bouazizi, a microentrepreneur, who sparked this revolution in a single act of protest against the same harsh economic realities shared by the majority of citizens across the Arab world.” ~ Elissa McCarter, Vice President of Development Finance, CHF International
As the quote suggests, the majority of citizens in the developing nations of the Arab world are fighting against stagnant economies in their countries. From street food vendors, taxi drivers, and government employees, to students and housewives alike, they are all seeking a common goal: to improve their living conditions and empower themselves to make changes – whether political, social, economic, or personal.
While the Middle East remains one of the most politically volatile regions, its microfinance portfolio retains one of the highest repayment rates and lowest percentage of portfolios at risk according to 2011 Sanabel and MIX MENA Regional Snapshot. The MENA portfolio has survived despite:
- The Bagdad Uprising in 2005
- The “July War” in Lebanon in 2006
- The Blockage of Gaza strip in 2008
- The Egyptian Revolution that started in 2011
- The Ongoing Arab Spring
Speaking about the impact of the Arab Spring on MFIs of the region, the former executive director of Sanabel says:
“You would think that MFIs would only be focused on institutional survival, but they have been putting their clients’ needs ahead of their own.” - Ranya Abdel-Baki
Yet as the regional snapshot reports, MFIs in the MENA region still have the lowest outreach, among MFIs worldwide, to populations that are in need of microfinance services, including rural clients.
According to the Center for Financial Inclusion:
- Only 18% of adults in the MENA region have a bank account (compared with 41% in other developing countries).
- 1/3 of the Arab World population is composed of working-age Youth.
- 1/4 of the Arab Youth are unemployed.
- 80 million new jobs are needed in the next 15 years to support unemployed Arab Youth based on current demographic projections.
While the current direction of the Arab Spring and its effectiveness in toppling dictatorships and establishing democracies remain heavily debated, one thing is for sure:
Peace cannot be established without opportunities for financial inclusion and economic development.
Though microfinance is not the solution to all the challenges of the MENA region, it is one piece of the puzzle for creating stability…and each piece, regardless of how small, is crucial to completing the entire picture. By making microloans as small as $25 through Kiva, we all have the opportunity to be a small part of the peace process.
Support microloans for Arab Youth and help in the creation of economic opportunities for a more peaceful world.