asala market research report
TRANSCRIPT
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Market Research report on client
satisfaction and new product development
IKM Methodology (Impact,Knowledge and Market Research)
PlaNet Finance Belgium
January 2007
Palestinian Business Womens Association
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Palestinian Business Womens AssociationAl-Bireh, Irsal Area, Saber Taweel Bldg.
Tel: 02 2400532
Fax: 20 2402433
P.O.Box: 2316 Ramallah-Palestine
E-mail: [email protected]
Web page: www.asala-pal.org
rd
Design & Printing:
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11. INTRODUCTION
1.1 METHODOLOGY1.1.1 Sampling method1.1.2 Data collection method1.1.3 Limitations of the research
2. SURVEY RESULTS ON CLIENT SATISFACTION IN GAZA STRIP AND THE
WEST BANK
2.1 CHARACTERISTICS OF HOUSEHOLDS AND THEIR ACTIVITIES2.1.1 Demographics2.1.2 Household characteristics2.1.3 Economic activities of clients2.1.4 Financial services use and access
2.2 CLIENT SATISFACTION2.2.1 Relationship with ASALA2.2.2 Social Impact of participation in ASALAs program
3. ANALYSIS OF FOCUS GROUPS RESULTS ON THE NEEDS OF NEW
FINANCIAL AND NON FINANCIAL SERVICES FOR ASALAS CLIENTS
3.1 FINDINGS3.1.1 Supply of microfinance services3.1.2 Summary on demand for new microfinance services3.1.3 Summary on demand for non financial services3.1.4 Key programming considerations from analysis of FGDs findings
3.2 SUPPLY OF CURRENT FINANCIAL SERVICES BY ASALA
3.2.1 Interest rates3.2.2 Guarantors procedure3.2.3 Grace period
3.3 DEMAND FOR CAPITAL AND PURPOSES FOR NEW LOANS3.3.1 Use of future loans3.3.2 Purposes for a new loan3.3.2.1 Business improvement loans3.3.2.2 Marriage loans3.3.2.3 Housing loans3.3.2.4 Car loans 303.3.2.5 Education loans3.3.2.6 Family loans3.3.2.7 Health treatment loans3.3.2.8 Loans to repay debts3.3.2.9 Loans for investment in land
3.4 DEMAND FOR NON FINANCIAL SERVICES3.4.1 Training3.4.2 Networking
4. RECOMMENDATIONS ON FINANCIAL PRODUCT DEVELOPMENT AND
NON FINANCIAL SERVICES
4.1 CURRENT LOAN PRODUCTS4.2 NEW LOAN PRODUCTS4.3 NON FINANCIAL SERVICES
4.3.1 Client coaching4.3.2 Networking:
4.4 PROGRAMMING RECOMMENDATIONS
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Since 2000, a number of studies have been carried out on theinformal sector and on microentreprises in Palestine. They
have provided information on the estimated number of them,their characteristics and those of their owners. More specifically, this
research focuses on the analysis of the financial and non-financialneeds of Palestinian microentrepreneurs, in particular current active
women borrowers at ASALA.
With the recent financial and economical crisis affecting thePalestinianTerritories, the financial needs of these microentrepreneurs
have also been changing rapidly, therefore the pertinence of thisstudy to enable ASALA to better serve its members.
The study was conducted between October and December 2006by ASALAs team in coordination with a PlaNet Finance consultant.
It must be noted that during this period, the situation in thePalestinian Territories has aggravated substantially in the Gaza strip.Collecting data in Gaza during a period of military intervention by
the Israeli Defence Forces shows the determination of ASALAs staff
in Gaza. Tragically, one of the clients that were interviewed duringthis research in Beit Hanoun was killed short after during clashes.
The results of this study also reflect this environment of political and
security crisis in Gaza. The aspirations of clients may be sometimesvery limited and show signs of their lack of economic perspectivesin the current context.
While in the West Bank, ASALAs borrowers think on how to improveor expand their existing projects, in Gaza, clients focus on the needs
of their families on mitigating the crisis or investing in the familyrather than their small businesses.
The methodology used to conduct this study is closely related toits objectives: to assess client satisfaction among ASALAs active
women borrowers and to better understand their needs for financialand non-financial services.
ASALA opted in this research for a participatory approach involving
1. Introduction
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its staff in the research exercise and using
both quantitative and qualitative tools. For this
research 381 active women borrowers at ASALAwere interviewed in a client satisfaction surveyand 39 focus groups discussions (FGDs) wereconducted with these clients to understand
their needs in terms of new financial and non-financial services.
This report is divided into 4 chapters includingthis general introductory summary.
The first introduction chapter includes thedescription of the methodology used and
the context in which the study has been
conducted.
The second chapter contains an executivesummary of the quantitative analysis onclient satisfaction and the views of ASALAs
active clients on new product developmentin the West Bank and in Gaza Strip. It provides
first an overview of microentrepreneurs andmicroentreprises divided in three sections:who are the microentrepreneurs and what
kind of microentreprises do they have and ananalysis of their credit needs and needs for
other financial services;
The third chapters includes detailed information
on the kind of financial and non financialservices requested by ASALAs active clients interms of type of loans, purposes for a new loan
and others relatives to the improvement ofASALAs current products and services, in order
to better adapt them to its clients needs. It alsoprovides an analysis of credit behavior whichallows for and identification of new potential
products for ASALA and improvement ofexisting ones.
Chapter four provides recommendations onproduct development for loans and other
financial services, including non financialservices.
1.1 Methodology
This research has been carried out on therequest of ASALA in order to understand what
are the needs of its active client base, in thecurrent Palestinian context, and how could
ASALA react to this evolving reality in terms ofreviewing its current product offer of financialproducts to better adapt it to the needs of its
clients.
The participatory approach used means
clients have been directly addressed by theinstitution, in order to express freely their
opinions on ASALAs products, staff, service
and conditions. They have been able to doso through a survey distributed among them
and in focus group discussions moderated byASALAs staff. Arrangements were made so that
no staff member dealt directly with her directclients to avoid clients feeling uncomfortable,or having to judge the organization before the
person that will decide on their next loan
Both the quantitative data obtained from this
survey and the qualitative data gathered in thefocus group discussions are analyzed in this
document.
1.1.1 Sampling method
A sample of ASALAs clients was selected
randomly among its current active womenborrowers. This sample was used to conducta survey among 381 clients in both West Bank
and Gaza Strip 63% in Gaza and 27 % WestBank. The figure below details the areas of the
study.
Significant amounts of information were
collected from these clients focusing mainly onproduct development and client satisfaction.
Data entry has been done by ASALAs team
using MS Excel and data analysis has beenperformed by the PlaNet Finance Belgium
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team using mainly the SPSS statistical package.All questionnaires were first controlled by asupervisor at ASALA before data coding. At this
stage, the data was verified in order to avoidincoherence in the final analysis, due to human
error during data entry and coding or false orexceptional information provided by clients.
The researchers tested the working hypothesesdeveloped for the study during field visits
with ASALAs team. These hypotheses wereintended to assess the status of demand formicrofinance from ASALAs clients and identify
gaps between supply and demand for themicrofinance services of ASALA.
This research has also allowed collectingqualitative information from focus group
discussions conducted by ASALAs staff. In total,364 active women borrowers participated in39 focus group discussions conducted during
fieldwork.
The focus groups were distributedgeographically as follows: 25 in Gaza Strip and14 in the West Bank.
The distribution of the 25 focus groupsconducted in Gaza is as follows: 1 in Gaza City,
7 in Deir El Balah, 4 in El Nusirat, 9 in Jabalia and
4 in Beit Hanon. 240 active women borrowers
participated in Focus Group Discussions inGaza.
Summary tables for FGDs distribution and
composition are provided below according tothe number of loan cycles and the four types ofloans provided by ASALA for their clients: Micro
Individual Loan (MIL), Small Individual Loan(SIL), Islamic Loan (IL), Group Loan (GL):
j
(%)
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Gaza Strip FGDs distribution
Type of loans # of Loan Cycles
No. ofclients
IslamicLoan
GroupLoan
Firstcycle
Secondcycle
Thirdcycle
Fourth andmore
Gaza city 9 0 9 9 0 0 0
Jabalia 8 1 7 3 1 1 3
Jabalia 10 4 6 2 0 1 7
Jabalia 8 0 8 2 0 1 5
Jabalia 6 0 6 2 4 0 0
Jabalia 10 1 9 4 4 1 1
Jabalia 11 1 10 5 4 1 1
Jabalia 12 1 11 3 5 1 3
Jabalia 11 5 6 2 0 2 7
Jabalia 10 0 10 6 4 0 0
Beit Hanon 8 0 8 2 4 0 2Beit Hanon 9 0 9 5 1 2 1
Beit Hanon 8 0 8 4 4 0 0
Beit Hanon 9 0 9 2 0 6 1
Deir el Balah 10 1 9 5 4 0 1
Deir el Balah 9 1 8 2 1 1 5
Deir el Balah 9 0 9 1 1 4 3
Deir el Balah 9 0 9 5 0 1 3
Deir el Balah 13 0 13 2 3 2 6
Deir el Balah 9 1 8 0 6 1 2
Deir el Balah 9 0 9 4 4 0 1
El Nusirat 11 1 10 3 6 0 2
El Nusirat 10 1 9 1 5 1 3
El Nusirat 11 4 7 1 7 0 3El Nusirat 11 4 7 1 5 0 5
Total 240 26 214 76 73 26 65
In the West Bank 14 focus group discussions were conducted with a total of 124 clients participating.The distribution is as follows: 3 focus groups were conducted in Bethlehem, 2 in Ramallah, 8 inJenin and 1 in Nablus.
Table 1
The sampling of the clients selected for the focus group is differently composed between Gazaand the West Bank clients.
In Gaza, the majority of active ASALA clients have group loans whereas in West Bank the majorityhas individual loans. This difference of type of loan may explain the reason why the idea of aproject for a new loan is expressed differently in Gaza and in the West Bank.
The second difference between the two types of focus group in Gaza and in the West Bankconcerns the number of loan cycles. Indeed, in West bank, most of the clients are engaged in their
first loan cycle whereas the in Gaza are engaged in second or third or more loan cycles.
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West Bank FGDs distribution
Type of Loans # of Loan cycles
Local No. ofclients
MIL SIL IL GL Firstcycle
Secondcycle
Thirdcycle
Fourth andmore
Bethlehem 1 8 4 2 2 0 5 3 0 0
Bethlehem 2 11 7 2 2 0 7 4 0 0
Bethlehem 3 10 7 1 2 0 9 1 0 0
Ramallah 1 6 3 3 0 0 5 1 0 0
Ramallah 2 7 3 4 0 0 5 2 0 0
Nablus 11 11 0 0 0 11 0 0 0
Jenin 1 8 4 0 1 3 6 0 2 0
Jenin 2 9 3 0 1 5 5 2 2 0
Jenin 3 8 4 0 1 3 2 4 1 1
Jenin 4 13 6 0 1 6 7 2 2 2
Jenin 5 5 1 0 2 2 2 1 1 1
Jenin 6 7 1 1 2 3 3 2 1 1
Jenin 7 10 1 0 0 9 3 5 2 0
Jenin 8 11 8 0 1 2 3 8 0 0
Total 124 63 13 15 33 73 35 11 5
Table 2
1.1.2 Data collection method
Quantitative Tools:
In order to conduct a client satisfaction survey
among ASALAs active clients the IKM (Impact-Knowledge-Market) standard questionnairedeveloped by PlaNet Finance, has been
adapted according to ASALAs specificitiesand to the target group of women active
microentrepreneurs. The survey process wascomposed of four main steps:
Initial adaptation by ASALAs team duringproject preparation.
Second adaptation following theorganization of 4 focus groups with 6-10
clients in both West Bank and Gaza Strip.During the focus groups, the questionnairewas thoroughly tested for cultural and
socioeconomic relevancy.
Final adaptation with ASALA employees
during field testing. After training,interviewers delivered the questionnaire to
approximately 20 people in order test thevalidity of the questionnaire. This stage oftest of questionnaire development led to
the final version which was then used.
Data collection survey on 381 active clients
performed by ASALAs team
Since the purpose of this research initiative is
to collect information on client satisfaction andthe demand and needs expressed by clients in
terms of current access to loans and new typesof loan products and non financial services. Theresults of this initiative are intended to provide
guidance to donors and ASALAs practitionersfor making sound decisions to improve their
current microfinance programs.
Qualitative tools:
To gather qualitative data on the needs andrequirements of ASALAs active clients in termsof existing and potential new financial and non-
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What do you think about the currentprocedures for having a loan with ASALA?
What types of training and apprenticeship
programs would be appropriate for you?
What kind of non-financial services would
you expect from ASALA?
1.1.3 Limitations of the research
Social research usually has a certain number of
inherent problems. For example, the difficulty in
Between the two different approaches of thestudy carried out in parallel, a quantitative
survey on client satisfaction and qualitativeFocus Group Discussions, the type ofinformation collected through each method
may somewhat differ for a number of reasons.
The first one is a technical reason: due to the
fact that in the questionnaire, most questionsare closed the answer is limited to the different
possibilities proposed in the questionnaire.In contrast during focus group discussions
financial services, the research team in charge
of data collection conducted 39 focus groups
discussions with active women borrowers.Some of the primary research questions theteams sought to address are the following:
What would you ant to do if you received anew loan from ASALA?
What would be your investment with this
new loan?
What is the amount that you would expect
for this new investment?
gaining the trust of respondents, within a short
period of time, may impact the objectivity of
the research.
The main concern experienced during thedata collection in this research, is that some
respondents may have regarded this exerciseas an inquiry on their behavior, their revenuesor their privacy and therefore may have not
cooperated fully with the interviewers orprovided biased answers. This inevitably brings
the perfect accuracy of the data collected fromsuch respondents into question.
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the speech is rather free for the interviewees.
Which allows them also to emphasize certain
views (such as the issue of interest rates), giventhe fact that they perceive the focus groupframework as a chance to complain andmotivate changes in ASALAs policies to their
immediate best interests.
For this reason, the information gathered in
focus groups often focuses more on what clientsdislike/want rather than what they would
objectively need to improve their business orsituation through access to new services thatASALA could provide them with, even if these
needs are obviously also expressed.
Thus it is important to bear this issue in mind,when reading some of the study findings from
Focus Group discussions.
The second reason is a sociological one: in
a group people are influenced by othersviews and therefore dominant persons tend
to influence others views. In certain casesthe outcome of group discussions is certainlymore homogeneous due to the fact that the
moment an issue was raised by one of theparticipants (such as the current guarantee
procedures or the current cost of a loan, etc),they issue needed to be debated by the wholegroup, even if a number of participants were
not necessary as concerned by those issues assome others.
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2.1 Characteristics of households and their
activities
2.1.1 Demographics
Age
The youngest client interviewed is 18 years old and the oldest 63years old, however most respondents are between 28 and 45
years old (figure 2). The majority of women surveyed are married(85%), while 10% are single, 3% are widowers and 2% are divorced(figure 3).
Figure 2
Figure 3
2. Survey results on client
satisfaction in Gaza Strip and
the West bank
85
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Figure 4
Education
Concerning the level of formal educationreached by the clients interviewed, 19% have
completed university or college education, 33%
have received secondary school education;
31% preparatory education; 14% only primary
schooling; and 3% received no formal schooling(figure 3).
But it is important to notice as shown in the next
page (Table 3) that the lack of education affectsmainly the older clients and is significantlylower among respondents between 18 and 30
years old.
Table 3 : Level of Education by Age category
% within Age categoryAge category
17 to 30 31 to 40 41 to 50 51 to 60 61 and more
Education
No education 0% 3% 6% 7% 33%
Primary school 5% 12% 18% 33% 67%
Preparatory school 31% 32% 39% 16%
Secondary school 37% 36% 22% 35%
Polytechnic / College 6% 6% 10% 9%
University graduate 20% 11% 6%
Total 100% 100% 100% 100% 100%
2.1.2 Household characteristics
The average household profile (householdmembers living in the same house other thanthe respondent or people who depend on the
clients interviewed; such as children, family
members, etc) is composed on average of 7dependants (figure 5) per client.
As shown in Figure 6, average clients
contribution per month to the householdsbudget by the women clients surveyed ranges
between 0 and 250 NIS for 17% of clients(under 50 USD), 250 and 500 NIS for 33% of
them (50-100 USD), between 500 and 1000 NISfor 28% (100-200 USD), 1000 and 2000 NIS for
13% (200-400 USD), and more than 2000 NISfor 9% (over 400 USD).
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Figure 5
Figure 6
2.1.3 Economic activities of clients
Within this sample 40% of the respondents live
in cities, 35% in villages, and 25% in camps.
In terms of education, we can not notice major
difference between clients living in cities,camps or villages as well as between people
living in West Bank and Gaza.
Figure 7
As shown on figure 8, trade is the most
important economic activity of ASALAs
clients surveyed in this study (43%), althoughthe degree to which it is exercised varies bylocation.
The second principal activity of those surveyedis raising animals (28%), followed by production(e.g. pottery) (15%), service (e.g. beauty salon)
(7%), agriculture (6%) and professionals (1%).(e.g.: Pharmacist or Physiotherapists)
Number of dependents
33
28
13
9
17
43
28
15
7
6
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2.1.4 Financial services use and access
Figure 9
Considering loan type (figure 8), 64% of clientsinterviewed use group lending, 30% micro
and small individual lending and 6% Islamiclending.
A table presenting loan type per location ispresented below. The difference of distribution
between the three types of loans offered byASALA1 (individual, group and Islamic) is not
substantial. Nevertheless we find more grouplending in villages than in cities or camps andnearly no Islamic lending in villages.
Comparing loan type by region shows thatmost clients in Gaza have access to group
lending (88% versus 12% for individual). In West
On average, the last loan received by ASALAmicroentrepreneurs participating in this survey
amounts to 1,933 USD, while the average clienthas taken 2.2 loans. However average loansin Gaza, where the majority of clients receive
group loans, amounts to 781 USD while in WestBank where most clients surveyed received
micro and small individual loans the averageloan amount is of 3901 USD.
Other significant differences in loan amountcan be seen when analyzing data by loan cycle,type of activity, and location.
Figure 10
Bank, the majority of loans are individual (61%)compared to group lending (22%) and Islamic
lending (16%).
% City Camp village
Individual lending (MIL & SL) 34 32 24
Group lending 57 62 75
Islamic Loan 9 6 1
Total 100 100 100
1ASALAs current product offer includes:MIL = Micro Individual Lending from 1000$ up to 5000$SL = Small lending from 5500$ up to 20000$
IL = Islamic lending from 5500$ up to 15000$GL = Group lending from 200$ up to 1500$
Group Individual Islamic Loan
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Regarding segmentation by loan cycle, we can observe differences in the average loan size
received.
Location City Camp Village
Average Loan amount (US$) 2187 2196 1178
Average Loan Gaza (US$) 709 652 964
Average Loan West Bank (US$) 3316 5216 3278
# of cycle 1 2 3 4 5 6
Average Loan amount (US$) 2123 1825 1560 1565 2405 2300
Average Loan Gaza (US$) 387 551 715 1241 1771 2236
Average Loan West Bank (US$) 3859 4071 3356 5233 6000 3000
Type of activity Services Production Agriculture Livestock Professionals Trade
Average Loan amount
(US$)2554 1721 1143 1451 7417 1927
Average Loan Gaza(US$)
638 861 591 648 1300 893
Average Loan West
Bank (US$)4213 3794 1750 3767 10675 3886
Regarding segmentation by type of activity, agriculture receives the lowest average loan size whileprofessionals receive the highest.
Regarding segmentation by location, average loan size is similar in cities and camps (around
2100US$) but the average loan size in villages is nearly half (around 1100US$).
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As these figures show, the fact that the sample
includes more Gaza clients to reflect the
distribution of ASALAs clients between Gazaand West Bank (240 vs. 141), and that mostof ASALAs clients in Gaza have only receivedgroup loans (Group lending as per ASALAs
procedures allows loans from 200$ up to 1500$maximum); explains why average loan amounts
in Gaza are lower compared to West Bank.
In West Bank the majority of clients receive
individual loans which can be Micro loans, Smallloans and Islamic loans (with amounts rangingfrom 1000$ up to 5000$ or Micro Individual
loans; 5500$ up to 20000$ for Small Loans and
from 5500$ up to 15000$ for Islamic loans).
This explains the more important loan volumesin West Bank, even if the number of clients
represented in the sample is significantlylower.
2.2 Client satisfactionIn the current context in the Palestinian
Territories, where the continuing occupation,together with the salary crisis and political
tension has seriously damaged the economicopportunities of many microentrepreneurs,ASALAs clients are no exception. The purpose
of this exercise is to focus on those clients ofASALA that are still active in their businesses
and continue to lend and reimburse theirloans.
For ASALA it is critical to understand deeplynot only the needs of this client base butalso to focus its efforts on listening to these
clients to be able to adapt its current productsand procedures and develop new services to
deepen its position with this critical groupof clients, improve its relationship with themand assist them in this difficult period. This
survey on clients satisfaction is part of ASALAstrategy to listen to its clients and ensure their
currents and future needs will be met by theorganization.
2.2.1 Relationship with ASALA
Figure 11
Figure 12
When asked which are the three things they
value most in their relationship with ASALA,the first aspect that clients value is the good
treatment they receive from the organization
(55% first answer and 21% second answer).Other means clients highlight a variety of
personal reasons why they choose ASALA suchas: honesty of employees, help received when
needed, good reputation, etc>
They appreciate as well the fact that it is easy
y
y
(%)
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and fast to get a loan (10% first answer and
16% second answer) and the fact that ASALA is
flexible for the repayment (6% first answer and12% second answer).
Other elements that clients value in their
relationship with ASALA are: support tothe clients business, access to credit, goodproducts, its understanding of the client
situation, and finally the relation of trustbetween the organization and the client.
In terms of what clients dislike of ASALA(figure 13), 30% (20% as second answer) ofrespondents, as may be expected do not like
paying service charges or interest rates; while29% (5% as second answer) claim that they
dislike the group lending methodology. Thethird negative issue is the obligation to provideguarantors (9% as first answer 13% as second
answer).
The issue of service charges and interest is aclassic response worldwide, when asking clientswhat they do not like about the institution,
they would obviously prefer not to have to payservice charges or interest rates on their loans.
As we experienced in Focus Group Discussions,group lending clients would want to be able
to access individual loans since they wanthigher loan amounts than those provided ingroup lending, however lack of guarantors
or ASALAs current policy in Gaza, leaves themwith no option but to accept group lending
with smaller loan amounts available .
Providing guarantors is an obligation which
applies only to new clients who requestindividual loans > US$1,500, and may be difficult
to provide in the current context, or it meanspeople may be indebted to someone else inthe future for having guaranteed them.
Other minor reasons of dissatisfaction areloan amount (group lending clients would
want larger loans) the location of the offices (4
main cities in West Bank), the legal procedures
needed to have a loan (court, notary deedfor individual loans) the repayment period,the installment period, and the installmentamount.
Figure 13
Figure 14
When clients consider the three things thatinfluence the most their decision to apply for aloan at ASALA, they value the following issues
from the most to the least important (figure13).
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31% it because ASALA helps them to improvetheir business, 23% as a way to increase theirincome, 10% because they needed money andin order to face the current bad political and
economic situation, 8% in order to launch anew project and finally, 4% in order to improve
their living conditions.
Figure 15
The category other includes client statementson why they chose ASALA such as: it helpedme to feel more independent, the fact that
ASALA cares about women or to complementmy husbands income.
The majority of clients state that it is very easy(72%) or easy (20%) to become a client of
ASALA (figure 14).
A few clients state it is neither easy not difficult
to take a loan and only a very small percentageestimates that its difficult to become a member
(under 2%).
Both clients from Gaza and West Bank have
similar views on this issue.
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Respondents were also asked to rank the
importance of various aspects of theirrelationship with ASALA using the followingscale: 1: Excellent; 2: Good; 3: Average; 4: Bad; 5
Very bad. An average score has been calculatedaccordingly
The ranking is nearly excellent in all aspectswith respondents valuing most the easyaccess to loan officers, and the fact that ASALA
wants to offer better services, they way ASALAhandles the relationship with clients, following
up on their projects and understanding theirproblems when necessary.
Figure 16
What clients find more difficult is accessing
ASALAs offices, although difficulty in movement
may have to do with this too.
Figure 17
The ranking of attributes of the servicesproposed by ASALA is between good and
average on nearly all aspects: loan amount,repayment, grace period guarantee, etc.
Rapidity of loan is considered as excellenttogether with monthly repayments and access
conditions to loans.
Loan amounts and repayment amounts rank
as good and only guarantees and interestrates are ranked by clients between good andaverage by the majority of respondents.
The issue of guarantees, in particular will befurther explored in the analysis of Focus Group
Discussion results.
2.2.2 Social Impact of participation in
ASALAs programClients surveyed perceive different impactsfrom their participation in ASALAs microfinance
program. In this exercise clients were askedabout impacts at different levels: family level,business level and income level.
Figure 18
ranking)
ranking)
Very easy Easy Neither Difcult
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In this exercise the positive impact perceivedby clients is crucial to be able to evaluate how
access to loans impacts their lives beyond beingable to start or invest in their businesses. In thecase of microfinance, where loan amounts are
small, often the increase in income may not bethe only or major impact of having a loan. In
the case of ASALA, whose clients are exclusivelywomen issues such as increased autonomy,respect from husband or family, increase ability
to make decisions within the family, etc; arealso of outmost important not only for ASALA,
but specially for the clients themselves.
Figure 19
Figure 20
The perception of respondents regardingimpact on the family due to their participation
in ASALAs loan program is that they have
experienced positive changes for a majorityof clients concerning all indicators except forsavings (figure 15).
Nearly all of the respondents see a positivechange in family conditions (91%), in womens
autonomy (91%), and family income (89%).
A large majority of clients perceive a positive
change in their ability to make decisions
on financial issues (84%), in respect fromtheir husband, children and family (80%),decision making on family issues (80%) andreimbursement of previous debts (75%).
69% have notice a positive change concerningrespect from their neighbors and 61% a
decrease in stress. 42% have noticed a changein their savings.
Regarding the perception of respondents tochanges in their business in relation to theirparticipation in ASALAs program (figure 16),
the change has been positive for a majority ofclients concerning all indicators.
Participation has a positive contribution toexpand business (88%) and brought income
for the project (86%).
yp
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About half have see a positive contribution
to improve quality of the products (58%), to
facilitate the sale of new products, to pay debtsof the business (55%), to allow cost reductionduring input purchase (55%) and to go on newmarkets (50%).
Only 35% have noticed a positive impact ofthe program to open a new business. However,
this is due to ASALAs policy of targetingminimum up to 25% start up projects within its
portfolio and to the fact that the group lendingmethodology is also a limit for start ups. Fewclients will want to guarantee a new start up
within group lending due to the increased s-
risk of default it represents for them.
Additionally 35% of respondents have noticeda positive change in using new suppliers. Yet
in terms of new employees, participation inASALAs program has had very little impacton the number of new employees hired. This
is due to the fact that most micro businessesare based on self-employment and that any
peak in activity is usually absorbed within thefamily.
As shown in the previous graph, 85% of theclients have responded that a positive change
Figure 21
that happened in their business since their
participation to ASALA is the increase of their
income.
The figures 17 shows for which purpose clientshave used this extra income.
27% of clients have purchased food with thisincome, 22% have reinvested in their project,
18% have helped their family or friends, 13%have spent in education of their children, and13% in the improvement of their house. 6%
have used it in health care.
The revenues generated through the micro
business for most respondents are eitherreinvested in the business itself or used to
cover basic family needs such as food, health,education or housing.
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3.1 Findings
At the household level, Palestinian women are importantcontributors to the economic survival of their families pursuing
a number of livelihood strategies.
Most of these strategies involve short-term informal sector work,including trading, small-scale agricultural production, handicraftsand light manufacturing. For clients, self-employment providessmall earnings and has the advantages of low barriers to entry,
flexibility in terms of time commitments, and is available evenduring crises periods.
Despite this, women are more and more engaged in formalactivities such as managing a boutique, a grocery, a beauty centre,
etc.... This access to a formal sector work highlights the major rolethat women play inside their family.
The Focus Group Discussions held by ASALAs team highlighted
a number of issues that require further attention by ASALAsmanagement of how to adapt its current products to the current
context and which new products and services (both financial andnon-financial) could be explored.
Key findings from this exercise have been organized in terms ofsupply of current services and demand for new services. Both issues
are analyzed in detail in the following section.
3.1.1 Supply of microfinance services
The key findings on the supply of microfinance services include:
Clients have difficulties in complying with ASALAs guarantorsprocedure; In particular new clients who request Individual
Loans for amounts over 1500$
3. Analysis of Focus Groups results
on the needs of new financial and
non financial services for ASALAsclients
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ASALA ought to adapt more to the current
difficult economic situation and conflict by
extending the grace period to more of itsclients; In particular group lending clients,who have currently only one month graceperiods.
Clients would always want lower interestrates
Clients would be interested in savingsproducts as well as loans.
3.1.2 Summary on demand for new
microfinance services
The key findings on the demand side involve anumber of interrelated factors that influence
existing economic activities or potential newprojects, including:
The need of loans to improve currentbusinesses.
The need of loans for housingimprovements.
The need of loans for purchasing vehicles.
The need of loans for marriage expenses orother social activities.
The need of loans to purchase land.
The need of loans to pay back previousdebts.
The need of loans to help familys men in
their business. (Family Loans that includesmen).
This case study presents these findings with
respect to clients demand for capital andsources of capital:
ASALAs clients need and want capital.
However, their capital needs are as much forfamily needs (i.e. marriage or education) asfor their business;
Microfinance is perceived as a source of
capital not only for them but also for other
members of their family;
For clients the priority of the investment fora new loan differs between the Gaza andthe West Bank; (see chapter findings)
3.1.3 Summary on demand for non
financial services
In terms of the demand for non-financialservices among clients, the key findings are:
Clients need a package of practice-based
experiential learning opportunities (versusstand-alone training; on-site coaching may
be particularly useful for clients living in ruralareas or camps which are unable to attend
classroom training in cities, as well as trainingin small groups to allow practical learning
Access to mentoring and support structures;e.g.: More experienced clients could becometrainers for younger or simply new clients at
ASALA. Experienced clients if remuneratedor compensated alternatively could become
a pool of experienced trainers and/orcounseling providers.
Access to finance including savings andcredit (although not necessarily via MFproviders)
When looking at the holistic needs of clientsconcerning small business development, it
is essential to consider non-financial themes,such as:
Building personal skills. Training rankedas the most important issue to build asuccessful business for clients
Networking ranked slightly at the sameposition
Marketing their products
Clients recognize also the need for social
help
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3.1.4 Key programming considera--
tions from analysis of FGDs findings
This research reflects the fact that significant
economic development is not likely to occurin the West Bank and Gaza under the currentconditions of occupation, lack of access to the
Israeli labor market, and extensive barriers totrade and commerce.
In this context microfinance becomesimportant as it allows ASALAs women clients
to create self employment opportunities forthemselves and earn additional income tosupport their families.
The main objective of this research is to developprogramming recommendations for ASALA as
well as broader recommendations on how toadapt ASALAs microfinance service to better
respond to the needs of its clients.
ASALA has conducted this research with its
clients to analyze the demand for microfinanceservices, using focus group discussions (FGDs),a qualitative tool adapted to this case study.
Based on these results, ASALA can propose,adapt or develop products according to thedemand expressed by the clients. Non financialactivities can be also promoted to engage
clients to improve their business in term ofskills, marketing, etc
3.2 Supply of current financial
services by ASALAThe first step in analyzing the demand is to
understand how women consider the currentprocedures to obtain a loan from ASALA.
The research team analyzed the informationgathered on current loans to understand how
clients appreciate the procedures of receiving aloan. Different issues appeared and perceptionsdiffer between Gaza and the West Bank.
Generally, participants in FGDs argued
that current conditions of loan access and
reimbursement (grace period, guaranteeprocedures, etc.) are a constraint to them.
They expressed the need to review some of
ASALAs procedures such as: lowering interestrates, adapting the grace period procedure tothe economic problems that clients have to
face, allowing the renewal of loans for goodclients regardless of arrears in the group (an
issue raised mainly group lending clients inGaza), etc. Some of these issues are analyzedhere in more detail.
3.2.1 Interest ratesThe interest rates rank third as a negative pointin ASALAs current procedures. For participants
of focus groups held in Gaza, it is the mostimportant issue in the micro credit procedureswhereas in the West Bank it is only the third
preoccupation of clients after grace period andguarantee procedures. Those who mentioned
the problem of interest rate would like ASALAto reduce interest rates.
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This issue is linked to the fact that ASALA offers
different product in both regions ( Group
lending and Islamic loans in GAZA, versusIndividual lending in West Bank and higher loanamount), therefore the different importance ofthis aspect for each group.
3.2.2 Guarantors procedure
One common finding which appearedconsistently in both Gaza and West Bank FGDs,
it is the guarantors procedure at ASALA.
In the 14 focus group in West bank and in
8 Focus group in Gaza, clients mentioned
different solutions or alternative procedures tochange the current guarantors procedure.
Even if 6 focus groups mentioned thepossibility of having a loan without guarantor,
the majority of clients who contest the currentguarantors procedure propose other ways to
provide guarantees. The most important oneis to accept checks instead of guarantors (animportant issue for individual loan clients).
Other clients mentioned the fact that otherMFIs in the region do so and that they consider
this procedure better than the ASALA one.Another alternative procedure mentioned by
30% of the clients, was accepting mortgage ofland and buildings instead of guarantors.
3.2.3 Grace period
According to the majority of the participants
in FGDs, the second main negative point inASALAs procedures is the grace period. In
the 14 focus group in the West Bank and 3 inGaza strip, clients expressed the fact that itwould be better for them having more flexible
repayment procedures. Among these clients,more than half of them expressed the idea to
have a larger grace period,) without interest,to alleviate the current conflict situation. Someclients also explain that late repayment is due
to the conflict context in the region and thatASALA ought to adapt its procedures to this
situation 2
3.3 Demand for capital and
purposes for new loansThe second step to analyzing the demand formicrofinance among clients is to understand
the economic activities in which ASALAsclients are currently engaged and the uses ofthe revenues they earn. The results collected
across the FGDs show that clients are engagedin a broad range of economic activities. There
is a consistent clustering around a number ofincome generating activities (IGAs) or typesof employment/self employment (shown in
Figure 1 for clients in the West Bank and Figure2 for clients from Gaza)
Figure 18: Main
activities of FGDparticipants Gaza (# of
clients)
It is important to bear in mind that ASALA has adapted to the current crisis situation. ASALA differed all payments from 1st April to Dec 31stwere differed & up to now in G aza with no additional charges While in the West Bank, payments have been differed on a case by case basis, when
justified. ASALA has not stopped disbursing new loans in this period.
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Figure 19 : Main activities of FGD participants West Bank (# of clients)
These categories group in fact a very diverse
range of businesses, below some examplesprovide an insight on what kind of businesses
ASALAs clients manage:
Trade : shops , grocery stores, supermarkets
and trading in household goods
Raising animals: sheep, poultry or rabbits.
Small production: embroidery, crafts, pottery,etc
Services: restaurants, beauty salon, etc
Professionals: pharmacist, physiotherapists,photographers, etc.
Agriculture: land cultivation or greenhouses
The majority of activities are short-cyclebusinesses in the informal or semi-formal sector,including petty trading, small-scale agricultural
and livestock production, handicrafts and lightmanufacturing, such as bakery, embroidery.
In general Palestinian women engage also intemporary work on government employmentschemes or intensive day labor in agriculture.
Their reliance on informal, short-term sourcesof income is consistent with the overall survival
strategies of poor families in the West Bank.
A World Bank report entitled Deep Palestinian
Poverty In the Midst of Economic Crisis reports
that most of the poor in the
West Bank are working poor
who have less stable jobsand earn less due to theirlower education. The reportstates that nearly half (48%)
of the working poor workonly sporadically, compared
to one-third (30%) of otherworkers.
Another area of broad concurrence across
all FGDs is that many women are pursuingself-employment, rather than wage labor, tomeet their economic needs. For women, self-
employment provides small earnings andhas the advantages of low barriers to entry,flexibility in terms of time commitments, and is
continuously available even during crises.
Some women explained how they increase their
income by running more than one business, orby trading up to a larger business. Participants
in 10 of 14 focus groups emphasized that theywere looking to earn relatively small amounts
of income while trying to finish school, take atechnical training course, look for a job, or savemoney to start a real business.
3.3.1 Use of future loans
One of the questions that were analyzed inFGDs with ASALAs clients is, what they would
want to use their next loan for and what sort ofloan would they need.
The research found that ASALAs clients would
use loans for more than one purpose. Capitalneeds or working capital for their businesses
being as important as facing family needs.
The priorities vary between Gaza and WestBank clients. However the needs are the same
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in term of housing loans, education loans,
marriage loans, purchasing car or improving
their business. What varies is how theseneeds are ranked between the two regions.Marriage ranking as a first priority in Gaza;while improving the business ranks as the first
priority for clients in West Bank.
Before analyzing these differences we have
to define a new type of loan that clientswould want from ASALA and was consistently
expressed in FGDs, this refers to family loans.
Clients from ASALA who are exclusively women
expressed the need of family loans as:
loans to open a shop for sons or brothers
loans to buy tools for their husbands
loans to buy a new store for their husbands
loans to buy a taxi for theirs husbands
loans to repair the land for agriculture for
theirs fathers
loans to build a house for their sons
What resulted from these discussions was thatwomen members of ASALA would want a
mechanism so that their male family memberscould also have access to ASALAs microfinanceservices, either directly or through their
membership. Currently ASALA focuses only onfemale microentrepreneurs.
3.3.2 Purposes for a new loan
In the FGDs held in West Bank and Gaza, thepurposes for a new loan were ranked as shown
in the below graph.
In West Bank, new loan capital would be
invested in both family and business needs.Housing loans and loans to open a new storewere the primary purposes for a new loan
for clients from the West Bank, followed by
educational loans, family loans, purchasing
cars, marriage loans, or health treatment
loans.
In Gaza however, the capital need would be firstinvested in marriage rather than in improving
existing businesses. Indeed, the first purposeexpressed for a new loan by the clients in Gazawould be to cover the cost of marriage and
the last purpose would be to improve theirbusiness.
These opposite views reflect the very differentsituations in which people live in Gaza versus
the West Bank and the different attitudes
towards religious beliefs, which make marriageand forming a family a priority for women in
Gaza.
However, in spite of this, many of the purposes
for a new loan suggested by clients are thesame in both West Bank and Gaza, what
changes is the priority.
The need for education loans, housing loans,
family loans and loans for purchasing a car,have been expressed by both groups.
3.3.2.1 Business improvement loans
In Gaza the need for improving the business isnot precisely identified. We can only providethe following findings on the average amount
expected by the clients for those who considera loan to improve their business in the future,
and would want to invest up to: 2500$.
In West Bank the information collected
gives us important findings on the need forimproving businesses. First of all in terms of
type of improvement and in terms of amountexpected for each type.
Clients who have expressed the need to improve
their business considered different possibilities.For example: improving a grocery store,
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Figure 3: Purposes for new loans in West Bank (#)
Figure 4: Purposes for new loans in Gaza (#)
opening a new store (requiring key money),building a new store, opening a bakery, a
boutique or establishing a supermarket.
In the FGDs held in the West bank, 10 groups
expressed the need for a loan in order toimprove their grocery or business, followedby opening a consumption institution and
building a new store.
For this, the average amount expected would
be of 9,485$ for improving the grocery andtheir business, even if the amounts expected
range from 500$ to 10,000$.
The average amount expected to open aconsumption institution is more important:
16,187$. The amounts desired ranging from2,000$ to 50,000$. The average capital deemednecessary to start a supermarket would be
30,000$.
3.3.2.2 Marriage loansIn Gaza, in 20 FGDs, the need for marriageloans was expressed as a purpose for using anew loan from ASALA. The average amount
expected was 4,987.5$. The highest amount
Number of time requested per 25 Focus Groubs
k
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requested was 8,000$ and the lowest one
2,500$. The most requested amount was
4,000$, expressed seven times.
While the need marriage loans is the mostimportant purpose for a new loan in Gaza, it
is in the West bank where the amount for amarriage loan is the most important. Indeed,in the 14 focus groups held in the West Bank,
the amount expected for a marriage loanstarts from 5,000$ to 20,000$. Thus the average
amount for a marriage loan would be of11,400$, reflecting the higher standards ofliving in the West Bank versus Gaza.
3.3.2.3 Housing loans
In FGDs held in both Gaza and West Bank, thepossibility of having a housing loan is one
of the key issues for clients. Of the 25 FGDsin Gaza, 25 focus groups had mentioned thisneed and in the 14 focus groups in the West
Bank, 13 focus groups suggested it too.
In terms of proportionality we can consider
that the needs in terms of housing loans areequal for clients from Gaza and from the West
Bank. According to the clients, a housing loan
can mean different things however: homeimprovement loans, building a new home,
buying an apartment, purchasing a house.
In West Bank the average loan expected for
housing would be 12,414$. However responseswere very different, certain clients would need
1,500$ for improving the house, while othersrequest up to 10,000$ for the same purpose,it is important to understand what kind of
house improvement they refer to. The loanexpected for housing by West Bank clients
starts from 1,500$ up to 70,000$. In spite of
the heterogeneity of the answers, most of theresponses were around 10,000$.
In Gaza, the average amount would be 5,200$,
while responses would be expressed in a morehomogeneous way. The loan amount required
for housing starts at 2,500$ up to 10,000$. The
need expressed in terms of housing loan is
most of the times 5,000$.
3.3.2.4 Car loans
A loan for purchasing a car is also one of thekey issues for clients in both Gaza and in the
West Bank. Of the 25 FGDs held in of Gaza, in21 FGDs the need for a loan to purchase a carwas suggested.
In the 14 FGDs in the West bank, 13 groupsexpressed it too. However of these 13 groups,
6 expected a loan in order to purchase a car
and the other 7 expected a loan to buy a taxi.In Gaza, no particular mention was maderegarding loans for taxis. This may requirefurther clarification. It could simply have to do
with the fact that a normal car might be ableto operate as a taxi in Gaza without need for
further investment.
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The average loan expected differs also by
region. The average loan expected to buy a car
in Gaza would be of 4,333$ whereas it amountsto 9,833$ for clients from the West Bank. Clientswho would want a loan in order to buy a taxi inthe West Bank expected on average loans up
to 21,714$.
3.3.2.5 Education loans
In both Gaza and West Bank, having a loan for
the education of the children seems to be ofthe major preoccupations of ASALAs clients.
For West Bank clients, an education loan istheir third priority, just after loans to improve
the business and housing loans. Indeed, in the14 focus groups held in this region, 9 focusgroups expressed the need for capital to invest
in the education of their children. The averageamount expected is 2,323$.
In Gaza, the need for an education loan is alsoan important issue but it is ranked lower inthe frequency of answers. Thus, the education
loan is the fourth purpose for a new loanafter marriage loans, housing loans and
car loans. However it is still one of the majorissues according to the fact that in the 21 focusgroup in Gaza, 11 focus groups, more than 50%
of the clients had expressed their need for aneducation loan. The estimation considered
necessary for an education loan in Gaza is onaverage 809$.
3.3.2.6 Family loans
The research found that women are importanteconomic contributors within their families. 9
focus groups in West Bank and 13 in Gaza hadexpressed the need for a loan for their husband,their son or their father. This family loan is one
of the highest loans expected. It is ranked 4th interms of priority in both Gaza and West Bank.
In other words, the family loan is as importantas the education loan for clients in Gaza and
nearly equal to education loans in West Bank.
Clients had expressed many ways of using a
family loan. Especially to buy a taxi for their
husband or their son, also the use of the loan inorder to built a house for their son, to buy toolsand furniture for their husband, and to helptheir husband to start a new business.
If the purpose for a loan is to help the differenttype of clients male relatives, the average
amount expected is different between the tworegions. In Gaza, the average loan expected is
lower than the average one of the West Bank.Indeed, in the West Bank the clients want onaverage 11,825$ whereas for clients in Gaza,
the amount is 2,958$.
The gap between these two amounts can be
linked to the existence of two very differenteconomic contexts. In Gaza, the idea of helping
their son and husband for ASALAs clients islimited to open a grocery for their husband orson, whereas in West Bank, the ideas for helping
their mens family are more ambitious. Indeed,
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some clients expected from the loan for men
to buy a taxi, to open a computer shop for their
son or to buy a truck, etc.
3.3.2.7 Health treatment loans
Health treatment is another common needfor clients in Gaza and in West Bank. Even if it
is less expressed than the other needs, healthtreatment is a major preoccupation for clients.Some of them have even expressed that the
purpose of such a loan would be to invest inpregnancy treatment.
Even if health treatment is not the main priority
for clients in terms of loan products it stillconcerns 45% of the focus groups participants.In Gaza, 10 focus groups had expressed theneed health treatment loans and 6 in West
Bank. The average loan considered necessaryfor clients in the West Bank is five time more
important than the average amount for clientsin Gaza. Indeed, in Gaza the average amountfor a health treatment loan is of 2,093$ whereas
in the West Bank the average loan is 10, 166 $.
However the West Bank average is somewhat
biased, by one clients request for 43,000$, whichmay be considered exceptional, increasing the
average figure. Excluding this amount, the
average loan wanted for health treatment in
the West Bank amounts to 3,600$.
3.3.2.8. Loans to repay debts
For clients in Gaza, another major purpose fora new loan is to pay back previous debts. 10focus groups expressed the need to use a new
loan to reimburse debts. In terms of priorityit is as important as a health treatment loan.
Clients for West Bank expressed also the needto reimburse debts with a new loan but only 3focus groups mentioned this need.
3.3.2.9 Loans for investment in land
For clients in West Bank, agriculture andthe livestock constitute one of the main
occupations of ASALAs clients, purchasing ofland is also considered a priority investment
for ASALA clients. 7 focus groups expressedthe idea to invest in purchasing land with anew loan estimated on average at 21,500$. In
Gaza only 3 focus groups expressed the needfor a new loan to purchase land requesting an
average a loan of15,000$
Figure 5 shows the main priorities for clients in terms of non financial services that ASALA could
provide them with.
Figure 5: Number of time suggested per 35 focus group held in Gaza and the West Bank
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3.4.1 Training
Training was ranked as the most important
variable for running a successful business,closely followed by networking with other
clients from ASALA.
The needs for training expressed by FGDs
participants, concerned issues closely relatedto their business such as:
Management
Computer skills
Vocational training
On-site counseling on how to improve theirbusiness,
Their main focus was on acquiring skills and tohave access to advice in order to succeed in
their businesses. Capital by itself is consideredinsufficient.
3.4 Demand for non financial
servicesThis section presents findings and analysis onthe need for non financial or support services
among ASALAs clients.
During FGDs, clients were asked for their needs
in terms services that they would expect fromASALA, beyond loans. The purpose of this wasto determine where access to capital lies in
terms of priorities for clients and how it fits withother development needs. This will provide a
more holistic view of the needs of clients.
The results from the focus group discussionhighlighted the importance that clients giveto several variables that affect the successof a business as training and coaching in
management, marketing, vocational training,information and access to new commercial
channels, etc.
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Most clients imagine would want ASALA to
provide them with services such as a vocational
or entrepreneurship training (due to their lackof basic skills) such as sewing skills, handicraftskills, computer skills, language courses inEnglish or Hebrew.
This illustrates that clients demand a holisticapproach to enterprise development. Terms
such as develop, improve, manage wereused regularly to convey the challenge behind
this training.
There was considerable discussion on the
relative importance of formal training versus
gaining practical experience through learningby doing. Indeed, several focus groups
participants would want ASALA to have clientadvisors who would come to them in their
businesses and advice them to improve theirskills and the way they manage their business.
Additionally ASALAs clients would want to
work outside the home and demand support
from ASALA to do so, for example:
Establishing a special training centre atASALA
Establishing a beauty care centre at ASALA
Establishing a computer training centre at
ASALA.
Some West Bank clients suggested also the
possibility to travel outside the country fortraining courses in business management and
marketing
3.4.2 Networking
The ranking results show that the creation of
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a network between ASALAs clients is one of
the main inputs women feel they need to be
successful.
Networking was defined by clients as a wayto rely on each other in order to improve their
business and to find solutions to their problemsthrough this channel
According to the discussion, the need of suchnetworking among ASALAs clients would allowa range of relationships between clients in order
to exchange or to enrich their experiences.
Clients recognized the key role of exchanging
experiences between them as more than justproviding training support. FGD participants
also spoke about their need to feel supportedby other ASALA clients through a communityof clients, while conserving the option to ask for
help and coaching from ASALA when needed.This indicates a need for enhanced dialogue
between them on key issues for the success oftheir projects.
Clients expressed several ideas to promoteinstitutional networking and exchange. Some
concrete ideas were suggested such as:
Organizing regular client meetings
A general assembly meeting for all ASALAclients
Establishing an exhibition hall for ASALA
clients products
Developing ASALAs member services
Developing card membership (allowingdiscounts and other advantages)
Networking was also perceived as a way forincreasing sales and marketing opportunities
or even creating new job opportunities at alater stage for members. Ideas were suggestedto create mechanisms that would allow ASALA
members to sell to each other.
Some participants argued that membership to
ASALA could be linked to access to discounts
in other companies (or even from each other).Additionally ASALA could also provide itsclients with the list of good wholesalers andretailers addresses.
According to clients, consistent support andcoaching seems to be the aspect they want
mainly from ASALA. However, clients clearlyexpress as well that business skills are better
acquired through practical exposure to runninga business or a series of small businesses alongwith other clients considered as colleagues
than by learning via training courses.
The enormous challenge for ASALA is to
find ways to truly address the needs andaspirations of its clients, through exercises
such as this study and to find ways to turnall this valuable information into realities thataddress its clients needs.
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the research shows that ASALAs clients needs are multiple.Clients want new loans to improve their businesses, to start
new ones, housing loans, loans to support their families, to payfor the education for their children, loans for consumption needs or
to finance their marriage.
4.1 Current loan productsThe adaptation of current loan procedures is an issue that was very
present during FGDs. ASALAs clients have expressed their viewson how current loan procedures procedures could be reviewedconcerning a number of issues, the most important are:
Loan amount: Group lending clients, particularly in Gaza, wouldwant to have access larger loan amounts and individual loans.
Guarantors: the guarantors issue has been highlighted byIndividual loan clients in both Gaza and West Bank, suggesting
an alternative methods could be applied such as accepting landor property as or checks (as other MFIs currently do) instead of
guarantors. Group lending clients would want a more flexibleprocedure that would allow good clients to renew loansregardless or arrears in the group.
Grace period: Group lending clients consider that the currentgrace period is not long enough. Particularly in Gaza, clients
argue that the economic and the political situation need to betaken into account in order to adjust ASALAs policies in terms of
grace period.
4.2 New loan productsASALAs clients have suggested in FGDs new ways of investing their
loans in issues that affect their families such as housing, education,marriage or the support for male family members. This appliesto clients in Both Gaza and West Bank. Besides this a number of
4. Recommendations on
financial product developmentand non financial services
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ideas have been proposed to improve current
businesses.
New Business loans: West Bank clients
mainly request capital for opening orimproving stores, boutiques or supermarkets.
The average amount expected for this would
be 16,187$. ASALA would require a stronganalysis on the viability of such businesses
before considering this sort of large longterm loans as well as on the creditworthinessof clients and eventual guarantees.
Marriage loans: Gaza clients expressedmarriage as the main purpose for using
a new loan from ASALA. The averageamount expected was 4,987$. This sort of
consumption loan could be considered forclients for the stabilizing factor it may have
on the family, which maybe consider a social
impact of such loans. However, detailedanalysis on the repayment capacity of these
clients would be required. Existing goodclients might be the targets of such a loanproduct on a case by case basis.
Housing loans: housing is a key issue forclients in both Gaza and West Bank. Loans
for home improvement or home building oracquisition loans would average 12,414$inWest Bank versus 5,200$ in Gaza. Unless
ASALA could modify its current proceduresin terms of guarantees (to accept the new
property as a guarantee) this sort of lendingought to be out of its scope, particularlyconsidering that other MFIs provide already
housing loans in Palestine.
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Health treatment loans: a common need
for clients in Gaza and in West Bank. The
average loan expected for clients in theWest Bank is 3,600 $ versus 2,093$ in Gaza.
This sort of product could be developedto target existing good clients, where
repayment capacity allows as a new orparallel loan to their existing one, increasing
the social impact of ASALA on its clients.
Loans to repay debts:an issue mentioned
by clients in Gaza. Such a loan couldbe developed in two ways. As a debtconsolidation product for clients with
access to individual lending that could
benefit from lower interest costs in this way.Alternatively where amounts may be small itcould be included as an additional amountto a normal business loan, where repayment
capacity allows. Existing good clients mightbe the targets of such a loan product on a
case by case basis.
Loans for investment in land:Agriculture
and the livestock constitute one of the mainoccupations of ASALAs clients in West Bankand access to land is an important issue
for clients. The average loan expected for
such purpose would be 21,500$ in westbank versus 15,000$ in Gaza. Such a loanproduct, unless ASALA could modify itscurrent procedures in terms of guarantees
(accepting land as a guarantee) ought to beout of ASALAs scope or considered only on
a case by case basis.
4.3 Non financial servicesASALAs clients have expressed in FGDs
the need to receive training and increase
networking and marketing opportunities inorder to succeed in their businesses.
4.3.1 Client coaching
An important issue highlighted by clients is that
Car loans: car loans are also key issues for
clients in both Gaza and in the West Bank,
in terms of purchasing both cars and taxis.The average loan expected would be of4,333$ in Gaza and 9,833$ in the West Bank.
The average expected loan for purchasing
a taxi in West Bank would be of 21,714$.Loans for car purchase if it means a business
enhancement or an income generatingactivity as well as improving family mobility,may be a potential new product for ASALA,
in particular if arrangements could be madewith car dealers or leasing companies in
Palestine. Existing good clients might be thetargets of such a loan product on a case by
case basis.
Education loans: In both Gaza and WestBank, having a loan for the education of the
children is a major worry for ASALAs clients.The average amount needed would be2,323$ in west Bank versus 809$ in Gaza. This
sort of product could be developed to targetexisting good clients, where repayment
capacity allows as a new or parallel loan totheir existing one.
Family loans: women are importanteconomic contributors as this researchshows and their concern for their families is
more than understandable and consideredas important as access to education
loans. The average loan expected for suchpurpose would be of 11,825$ in West Bankversus 2,958$ in Gaza. Family loans could
be considered on a case by case basis byASALA for a number of new businesses
as a way to empower women within theirfamilies and support their dependents. Thismay require an important change in the
policies of ASALA and a major shift in theorientation of the organization; however in
the current context in Palestine this couldmean an opportunity for ASALA to expandits outreach while benefiting from the
knowledge of its existing client base andincreasing its impact on the households of
its existing clients.
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on-site training or coaching is preferable forclients to formal classroom training courses.
The development of training materials anduse of external trainers may be a cost that
ASALA would not be able to absorb withinits current cost structures. However coachingand networking may be activities that could
be further developed by ASALA in a structuredmanner by reviewing its client monitoring
processes.
Coaching of clients may be an opportunity
for ASALA to strengthen the role of its loanofficers without incurring in additional costs.In addition ASALA could develop linkages
with other programs existing in Palestinethat provide vocational, business training or
language courses for entrepreneurs.
In addition a network of voluntary business
coaches could be developed by ASALA byinvolving successful clients in these activities.
When asked during FGDs, clients were prepared
to cover part of the cost of such training. Thiscontribution could be used to compensate
voluntary coaches for their efforts.
4.3.2 Networking:
The idea of networking has also been expressed
by ASALAs clients in FGDs as a way to rely oneach other in order to improve their business
and to find solutions to their problems.
Beyond coaching clients recognize the need to
learn from each others experiences. A numberof ideas were suggested to improve linksamong clients such as regular meetings or a
client assembly.
The organization of such meetings ought to
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be explored by ASALA. Such activity may be
channeled through existing group lending
meetings for a number of clients.
The experience from FGDs showed that clientswere willing to attend meetings to improve
the organization. Loan officers could organizeperiodically meetings in ASALAs offices amongits clients to facilitate such exchanges. Such
meetings may allow ASALAs members to sell toeach other or develop business relationships.
In terms of marketing opportunities, ASALAcould partner with other organizations to
organize exhibitions of ASALA clients products,
enabling clients to sell their products andpromote them to new customers.
Through the recruitment of a dedicatedstaff, ASALA could also develop new ways
of increasing the benefit of being an ASALAmember to attract new clients. The ideas
proposed by clients such as negotiatingdiscounts at wholesalers or retailers for ASALAmembers are another example of partnership
with other organizations (the private sectorin particular) that ASALA could develop. Such
schemes are currently developed by MFIsworldwide. Involving ASALAs board membersin such activities, where possible, may facilitate
the creation of such linkages. In additioninformation could be provided by loan officers
to clients on which wholesalers or retailers existin the area.
According to clients, support and coachingseems to be the aspect they miss nowadaysfrom ASALA. The challenge for ASALA is to find
new ways to address the needs of its clients.Exercises such as this research ought to be the
starting point for the development of suchactivities.
4.4 Programming
recommendationsThe success of the activities proposed in thisresearch in terms of development of new
products and services for ASALA dependson two key factors, the commitment of theorganization and the external support it may
receive.
In terms of the internal efforts that ASALA may
do, a number of issues are critical:
Involving board members in the revision
and adaptation of current products
Developing new loan products and services
to better serve its existing client base
Monitor client needs regularly through loan
officers and branch managers
Developing the capacities of its staff to
provide coaching to clients and non financialservices or raise fund for a specializedseparate unit for Business Development &
Networking for the women entrepreneurs.
Involving successful clients in the coaching
process in different areas
New microfinance products could include
small, short-term consumption loans,educational loans, and emergency loans withflexible repayment periods.
As mentioned previously in this research, clientsdemand is diverse and it differs between clients
from Gaza and West Bank. What is appropriateto one group of clients will not be appropriate
for another.
Donors can support demand studies andproduct development and innovation initiatives.Such support could allow ASALA to launch andtest training and counseling activities directed
to its clients to prepare the launch of new non-financial microfinance services at a later stage.
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Training activities may involve financial literacy
training, training on marketing products,
business development services, networkingand personal skills development.
ASALA should develop non financial services
in order to help its clients develop sustainablebusinesses. The design of such programshowever should be carefully monitored to
ensure that the financial sustainability of ASALAis not compromised.
In order for ASALA to develop non-financialservices in a large scale, a separate unit should be
created with its own staff and financial resources
for the development and management ofsuch services. The development of non-
financial services should not compromise thesustainability of ASALAs loan program so it
needs to be funded separately from revolvingfund operations.
In terms of the external factors that affectASALAs a number of issues may be critical inASALAs future development.
Access to long term funding to support the
development of new products Donor support to develop internal capacity
Donor support to develop formal non-
financial services such as formal training
Changes in current legislation
Donor support
Donor support will be critical in the future forASALA to reach its goals of outreach, product
diversification and increase impact.
Donors may use a number of instruments to
support developments in a number of areas.
Supporting ASALA with technical assistance
and access to long term capital would be an
effective way to increase the outreach and
quality of its microfinance products in current
underserved areas of Palestine.
Funding programs: a donor funded aspecial loan fund for new products (such
as education loans or emergency loanswith longer repayment terms for womenin difficult situations, etc) could be the
mechanism to support outreach andproduct diversification for ASALA as well as
other Palestinian Microfinance organizations.Alternatively a loan guarantee scheme forsuch new product could also be used.
Technical assistance: capacity building inthe development of new programs, training
for women entrepreneurs & loan officers incoaching and counseling of clients as well as
vocational trainings for microentrepreneursare areas in which donors can have animmediate impact in improving the quality
and diversity of non-financial services forPalestinian microentrepreneurs
Advocacy: involvement of donors in theimprovement of regulation of MFIs may
be another of direct impact for donorsin their support to ASALA as well as otherPalestinian MFIs. Changes in regulation
allowing collection of savings may have adramatic impact in improving the financial
sustainability of MFIs as well as on productdiversification and outreach to clients.
Finally supporting ASALAs in the growth anddiversification of its portfolio will allow not onlyincrease the number of women benefiting
from microfinance services in Palestine but alsoensuring its financial sustainability.
ASALAs clients and its families need access tonew financial and non-financial services from
ASALA to improve their businesses their skillsand living condition of their families and toface the difficult context in which they work
and live in Palestine.
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ASALAs responsibility is to listen
to their needs and grow as
an organization to meet theirdemands. ASALAs challengein the next years will be toundertake the necessary efforts
to turn its clients needs intorealities.
Donor support will be critical inorder for ASALA to increase its
loan capital and succeed in itsefforts.
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Region Address Phone Fax E-mail
Ramallah and ElBireh
Al Irsal Area , SaberTawil Building, next to theMinistry of Tourism, MailAddress Ramallah P.O Box2316
02/2400532
02/2409460 02/[email protected]@[email protected]
Gaza
EL Rimal, Al Jala andWihda streets Intersection, Bseiso Building, P.O Box5099
08/2843778 08/[email protected]@asala-pal.org
Deir El BalahBy Abou Saleem Mosque,Maher Al Masri Building
08-2538240 [email protected]@asala-pal.org
Beit HanounMain Street, Across theUN school, Sultan Al MasriBuilding
08-2456370 [email protected]@asala-pal.orm
El NuseiratMain Street, Maher AlTabba Building
08-2551240 [email protected]@asala-pal.org
JabaliaMain Street, Atallah AbouJalala Building
08-2450650 [email protected]@asala-pal.or
NablusAloul and Abu Salha Build--ing, 3rd foor
09-2398175 09-2398117 [email protected]
BethlehemJerusalem Hebron St, Aabdabuilding, Above Al Mashriqinsurance company
02-2753919 02-2753919 [email protected]
JeninYahya Ayash circle, AlBasateen Building, near theMagistrates Court
04-2505480 04-2505480 [email protected]
Asala Ofces and Braches
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