ASALA Market Research Report

8/12/2019 ASALA Market Research Report

1/48

1

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


2/48

2

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:


3/48

3

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

Table of Contents

5

669

10

13

1313141516181821

25

252526262727

272828282930303132323333343434353536

39

39394141

4342


4/48

4


5/48

5

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


6/48

6

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


7/48

7

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

(%)


8/48

8

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 13 0 13 2 3 2 6



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.


9/48

9

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-


10/48

10

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.


11/48

11

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.


12/48

12


13/48

13

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

10


14/48

14

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).

14


15/48

15

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


16/48

16

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


17/48

17

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$) but the average loan size in villages is nearly half (around 1100US$).


18/48

18

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

(%)


19/48

19

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).


20/48

20

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.


21/48

21

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


22/48

22

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


23/48

23

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.


24/48

24


25/48

25

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


26/48

26

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


27/48

27

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.


28/48

28

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.


29/48

29

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


30/48

30

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,


31/48

31

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


32/48

32

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.


33/48

33

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,


34/48

34

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


35/48

35

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.


36/48

36

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


37/48

37

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.


38/48

38


39/48

39

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


40/48

40

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.


41/48

41

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.


42/48

42

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


43/48

43

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.


44/48

44

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.


45/48

45

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.


46/48

46

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


47/48

47


48/48

ASALA Market Research Report

Documents

Transcript of ASALA Market Research Report