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Microcredit in Palestine (1995--2008): A business history perspective

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  • Paolo Di Martino
  • Shaker Sarsour

Abstract

This article analyses the development and functioning of the microcredit industry in Palestine in the period between its establishment as a partially autonomous political entity (1994) and the Israeli invasion of the Gaza Strip (2008). The article shows how, despite the increase in potential demand for microcredit due to the deterioration of the economic environment, the growth of the sector has been below expectation. One of the most important causes of this phenomenon has been the reluctance to lend resulting from the growing risk of late or no repayment of loans. Using original data from one microcredit institution (Arab Centre for Agricultural Development) and a quantitative approach, the article investigates the causes of this problem. Results show that the risk of late repayment was negatively correlated to the level of interest rate, to macroeconomic conditions, and to the age of the borrower while it was positively associated to the share of investment in the Gaza Strip, and to the size of loans.

Suggested Citation

  • Paolo Di Martino & Shaker Sarsour, 2012. "Microcredit in Palestine (1995--2008): A business history perspective," Business History, Taylor & Francis Journals, vol. 54(3), pages 441-461, June.
    • Handle: RePEc:taf:bushst:v:54:y:2012:i:3:p:441-461
    DOI: 10.1080/00076791.2011.638501
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    References listed on IDEAS

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    1. Marguerite S. Robinson, 2001. "The Microfinance Revolution," World Bank Publications - Books, The World Bank Group, number 28956.
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    Cited by:

    1. Widiarto, Indra & Emrouznejad, Ali, 2015. "Social and financial efficiency of Islamic microfinance institutions: A Data Envelopment Analysis application," Socio-Economic Planning Sciences, Elsevier, vol. 50(C), pages 1-17.

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