Small loans, Big Results
Jabalia Camp, Gaza

By Conal Urquhart

As the first Intifada petered out and the optimism of the Oslo era began,  1993 was probably the best time in almost a decade to start a business in the Palestinian territories.

Fatima Abu Askar,52, seized her opportunity when she received 1,000 shekels (US$250) from a local credit union she had joined two years before. She collected her money and set off for the main market in Gaza City. What she could carry would be the first stock for the grocery shop she planned to set up in the front of her house in Jabalya Refugee Camp, the largest in Gaza.

Her decision transformed her family from being among the poorest in Gaza, to being comfortable, if not wealthy. “Now, I can provide my children with whatever they need. I want my daughters to go to university. I will send one to computer training and I can only do all this because I started my own business,” she said.

Fatima, who is known as Umm Abed, which means the mother of her first born son, Abed, had one husband, seven young daughters and one son to look after. “I think people should depend on themselves instead of looking for charity from others,” she said. Umm Abed’s husband had not worked in more than three years because he was not allowed to work in Israel as a decorator because of the Intifada and back problems would prevent him working in the future. “I decided to start my own business because my son was handicapped after an accident and needed special medical help, my husband was sick and my daughters needed support” In 1993, events crystallised to give her the impetus to start her shop. Her children were now old enough to forego her constant attention and her investment in the credit union matured, giving her the necessary start-up capital. “It took me a while to decide to do it. I was a bit embarassed about doing it and my children were young. Then in 1993, I felt it was the right time.

“It was successful from the beginning and I immediately started thinking of expanding it. In ten years I want it to take up the whole street, “ she  said.

In most Palestinian areas it is unusual to find women working or owning business. However Gaza’s poverty has meant that there is a tradition of women working although it is not universal.

Umm Abed wears traditional clothes and a head scarf and is happy to talk to anyone. In most Gazan families, the husband would speak to strangers, but in Umm Abed’s shop, her husband makes tea for guests.

She was aware that her decision to start a business was unusual. “I faced difficulties when I started but I needed to support my family so I had to challenge what was normal in my community.

“I was nervous and embarassed in the beginning. I would stand in the shop for a few minutes and then hide in the back. But now I’m very proud of what I have achieved,” she said.

Umm Abed managed to get her business off the ground and expand it with the help of a series of loans from the United Nations Relief and Works Agency, the organisation that was set up to look after the Palestinian refugees in 1948, and continues to act as their main provider of social and educational services.

She used small UNRWA loans and her own money to finance trips to Egypt were goods could be bought much cheaper. “I would buy as much cigarettes and clothes as I could carry. Before the Intifada, I would go to Egypt every five months. I was not afraid of taking out loans because I was sure that I could recover the repayments because of the experience I had, “ she said. UNRWA launched its microfinance loans programme in 1991 in response to the rapidly deteriorating economic conditions in the Gaza and the West Bank, started by the Intifada which began in 1987 and exacerbated by the 1991 Gulf War.

Up until May 2002, the programmes had loaned a total of $61 million in 50,282 loans.

The loans to women in Gaza are just one part of a number of loans aimed at sole traders and small businesses in the West Bank and Gaza. The women are organised into “solidarity groups” who guarantee each other’s loans. The programme was designed that way because staff found that Gazan women worked well with strangers, explained Alex Pollock, the head of micro finance programme.

“We focused on women in Gaza because they were already in the market place unlike the West Bank, where there were no women involved in business. As a rule women from the coastal regions were more involved in trade while women in the highlands remained in the home. In Gaza half our loans go to women although they only constitute 30 per cent of the volume,” he said. Umm Abed was able to use some of the skills she had learnt at school such as mathematics and book keeping, but found she had to discover a taste for what people would buy.

“I had to think about what stocks to buy. I prefer to buy popular items rather than rarer good. I have never bought anything that did not sell eventually. Basic goods always sell well but I had to find out what brands people liked,” she said.

Like almost every Palestinian, she was severely affected by the second Intifada which began in October 2000. Her business has fallen by half, but she still has a turnover of US$100 per day and has US$5,000 invested in her grocery store.

She was able to deal with the down turn by buying less and using some credit. But the main reason for keeping her head above water was saving 50 shekels(US$12) every day. This meant there was always money for bills and some stock.

Now Umm Abed is looking forward to an improved economy in Gaza. “When I started the business things were better than now but they seemed pretty bad. People were being killed everyday and no-one was working. I have become very experienced in managing a business in difficult times “I’m planning to extend the house when the economic climate improves. I would definitely encourage other people to do it but so far I don’t know any that have.”