Financial inclusion policies in Palestine between exclusion and enslavement

Middle East

Dareen Sayyad and Reema Shbeeta

12 September 2023

In Palestine, where the elements of a true national state do not exist, the policies of the Palestine Monetary Authority (PMA) get lost between the illusion of the state and the reality of the occupation. The PMA was created as part of the Oslo Accords in the mid-90s to be a central bank in waiting for the promised future Palestinian state. However, the promised future state never materialized. The global-facing financial policies now pursued by the PMA – which lacks the powers of a central bank or even a national currency - seem flimsy, like a spider’s web where economic and development concepts overlap and contradict with the local context.

The National Strategy for Financial Inclusion introduced the current financial inclusion (FI) policies in 2014-2015, but most people do not realize its real goals. The PMA defines FI as enhancing access to, and use of, quality financial services and products by all segments of society, including women and the poor. However, as with other critical studies of FI elsewhere in the world, FI in Palestine is not just about providing financial facilities and services but giving capital more dominance over markets and political agendas.

As members of the research team on the project Transforming Financial Inclusion to Finance Inclusive Prosperity in Ramallah Palestine (2022-2025), we have met many people who were affected by FI policies, which have created new challenges for them to adapt to. The most important of these challenges is falling into debt. As one research participant put it:

“A person should not have to take finance to pay for human rights such as education and health."

Aside from increasing credit provision, another strand of FI policies seeks to increase the provision of finance for small projects and businesses used by women and the poor. In Palestine, 95% of all businesses are small or micro. Financing for small and micro businesses is crucial for women who want to start their own business, in a context where unemployment rates are very high, particularly among women. Unfortunately, studies confirm that most of the institutions providing such financing seek primarily to ensure their own profits, with one interviewee paying an interest rate of 14%*. These loans require guarantees that Palestinian women cannot meet, such as the availability of a regular income and owning assets.

The picture is no brighter for women who are not entrepreneurs. Many women don’t have control over their finances, and sometimes they are forced to take loans on behalf of their spouse. As a result, they find themselves facing prosecutions from financial institutions, the judiciary and the police when their spouse defaults. Women also face a difficult situation because of the lack of FI interventions related to social security, the rights of children and people with disabilities. For example, one of our research participants who we will call Yasmin, is divorced and has a child with special needs. She complains that injustice against women is not taken seriously. Her ex-husband avoided alimony payments and she was forced to sell her gold and take a loan to secure housing. She was then forced to search for a second job to repay this debt.

Many other stories we hear in interviews show that the financial situation of Palestinian women has not been improved by FI policies. Such policies should consider the needs of Palestinian women to a much greater extent. Women's economic empowerment polices must be rethought in relation to the Palestinian social, economic and political dynamics, particularly patriarchy and colonialism.

Reema Shbita is a Palestinian researcher, women’s rights activist and member of the FI - Palestine research team (Transforming Financial Inclusion to Finance Inclusive Prosperity in Ramallah, Palestine)

Dareen Sayyad is a Palestinian researcher, translator and member of FI - Palestine research team (Transforming Financial Inclusion to Finance Inclusive Prosperity in Ramallah, Palestine)

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فرص المرأة في الوصول إلى التّمويل في فلسطين فرص وتحديّات. المرصد ورقة سياسات: الصّالحي ، عبد العزيز (2020)

Bfuras almar'at fi alwusul 'iilaa alttmwyl fi filastin furas wthdyat. almarsad waraqat siasati: alssalhy , eabd aleaziz (2020)