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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 Association
Al-Bireh, Irsal Area, Saber Taweel Bldg.
Tel: 02 2400532
Fax: 20 2402433
P.O.Box: 2316 Ramallah-Palestine
E-mail: asala@palnet.com
Web page: www.asala-pal.org
rd
Design & Printing:
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1. INTRODUCTION
1.1 METHODOLOGY
1.1.1 Sampling method
1.1.2 Data collection method
1.1.3 Limitations of the research
2. SURVEY RESULTS ON CLIENT SATISFACTION IN GAZA STRIP AND THE
WEST BANK
2.1 CHARACTERISTICS OF HOUSEHOLDS AND THEIR ACTIVITIES
2.1.1 Demographics
2.1.2 Household characteristics
2.1.3 Economic activities of clients
2.1.4 Financial services use and access
2.2 CLIENT SATISFACTION
2.2.1 Relationship with ASALA
2.2.2 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 FINDINGS
3.1.1 Supply of microfnance services
3.1.2 Summary on demand for new microfnance services
3.1.3 Summary on demand for non fnancial services
3.1.4 Key programming considerations from analysis of FGDs fndings
3.2 SUPPLY OF CURRENT FINANCIAL SERVICES BY ASALA
3.2.1 Interest rates
3.2.2 Guarantors procedure
3.2.3 Grace period
3.3 DEMAND FOR CAPITAL AND PURPOSES FOR NEW LOANS
3.3.1 Use of future loans
3.3.2 Purposes for a new loan
3.3.2.1 Business improvement loans
3.3.2.2 Marriage loans
3.3.2.3 Housing loans
3.3.2.4 Car loans 30
3.3.2.5 Education loans
3.3.2.6 Family loans
3.3.2.7 Health treatment loans
3.3.2.8 Loans to repay debts
3.3.2.9 Loans for investment in land
3.4 DEMAND FOR NON FINANCIAL SERVICES
3.4.1 Training
3.4.2 Networking
4. RECOMMENDATIONS ON FINANCIAL PRODUCT DEVELOPMENT AND
NON FINANCIAL SERVICES
4.1 CURRENT LOAN PRODUCTS
4.2 NEW LOAN PRODUCTS
4.3 NON FINANCIAL SERVICES
4.3.1 Client coaching
4.3.2 Networking:
4.4 PROGRAMMING RECOMMENDATIONS
Table of Contents
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S
ince 2000, a number of studies have been carried out on the
informal sector and on microentreprises in Palestine. They
have provided information on the estimated number of them,
their characteristics and those of their owners. More specifcally, this
research focuses on the analysis of the fnancial and non-fnancial
needs of Palestinian microentrepreneurs, in particular current active
women borrowers at ASALA.
With the recent fnancial and economical crisis afecting the
Palestinian Territories, the fnancial needs of these microentrepreneurs
have also been changing rapidly, therefore the pertinence of this
study to enable ASALA to better serve its members.
The study was conducted between October and December 2006
by ASALAs team in coordination with a PlaNet Finance consultant.
It must be noted that during this period, the situation in the
Palestinian 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 staf
in Gaza. Tragically, one of the clients that were interviewed during
this research in Beit Hanoun was killed short after during clashes.
The results of this study also refect this environment of political and
security crisis in Gaza. The aspirations of clients may be sometimes
very limited and show signs of their lack of economic perspectives
in the current context.
While in the West Bank, ASALAs borrowers think on how to improve
or expand their existing projects, in Gaza, clients focus on the needs
of their families on mitigating the crisis or investing in the family
rather than their small businesses.
The methodology used to conduct this study is closely related to
its objectives: to assess client satisfaction among ASALAs active
women borrowers and to better understand their needs for fnancial
and non-fnancial services.
ASALA opted in this research for a participatory approach involving
1. Introduction
6
its staf in the research exercise and using
both quantitative and qualitative tools. For this
research 381 active women borrowers at ASALA
were interviewed in a client satisfaction survey
and 39 focus groups discussions (FGDs) were
conducted with these clients to understand
their needs in terms of new fnancial and non-
fnancial services.
This report is divided into 4 chapters including
this general introductory summary.
The frst introduction chapter includes the
description of the methodology used and
the context in which the study has been
conducted.
The second chapter contains an executive
summary of the quantitative analysis on
client satisfaction and the views of ASALAs
active clients on new product development
in the West Bank and in Gaza Strip. It provides
frst an overview of microentrepreneurs and
microentreprises divided in three sections:
who are the microentrepreneurs and what
kind of microentreprises do they have and an
analysis of their credit needs and needs for
other fnancial services;
The third chapters includes detailed information
on the kind of fnancial and non fnancial
services requested by ASALAs active clients in
terms of type of loans, purposes for a new loan
and others relatives to the improvement of
ASALAs current products and services, in order
to better adapt them to its clients needs. It also
provides an analysis of credit behavior which
allows for and identifcation of new potential
products for ASALA and improvement of
existing ones.
Chapter four provides recommendations on
product development for loans and other
fnancial services, including non fnancial
services.
1.1 Methodology
This research has been carried out on the
request of ASALA in order to understand what
are the needs of its active client base, in the
current Palestinian context, and how could
ASALA react to this evolving reality in terms of
reviewing its current product ofer of fnancial
products to better adapt it to the needs of its
clients.
The participatory approach used means
clients have been directly addressed by the
institution, in order to express freely their
opinions on ASALAs products, staf, service
and conditions. They have been able to do
so through a survey distributed among them
and in focus group discussions moderated by
ASALAs staf. Arrangements were made so that
no staf member dealt directly with her direct
clients 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 the
focus group discussions are analyzed in this
document.
1.1.1 Sampling method
A sample of ASALAs clients was selected
randomly among its current active women
borrowers. This sample was used to conduct
a survey among 381 clients in both West Bank
and Gaza Strip 63% in Gaza and 27 % West
Bank. The fgure below details the areas of the
study.
Signifcant amounts of information were
collected from these clients focusing mainly on
product development and client satisfaction.
Data entry has been done by ASALAs team
using MS Excel and data analysis has been
performed by the PlaNet Finance Belgium
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team using mainly the SPSS statistical package.
All questionnaires were frst controlled by a
supervisor at ASALA before data coding. At this
stage, the data was verifed in order to avoid
incoherence in the fnal analysis, due to human
error during data entry and coding or false or
exceptional information provided by clients.
The researchers tested the working hypotheses
developed for the study during feld visits
with ASALAs team. These hypotheses were
intended to assess the status of demand for
microfnance from ASALAs clients and identify
gaps between supply and demand for the
microfnance services of ASALA.
This research has also allowed collecting
qualitative information from focus group
discussions conducted by ASALAs staf. In total,
364 active women borrowers participated in
39 focus group discussions conducted during
feldwork.
The focus groups were distributed
geographically as follows: 25 in Gaza Strip and
14 in the West Bank.
The distribution of the 25 focus groups
conducted 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 in
Gaza.
Summary tables for FGDs distribution and
composition are provided below according to
the number of loan cycles and the four types of
loans provided by ASALA for their clients: Micro
Individual Loan (MIL), Small Individual Loan
(SIL), Islamic Loan (IL), Group Loan (GL):
j
(%)
8
Gaza Strip FGDs distribution
Type of loans # of Loan Cycles

No. of
clients
Islamic
Loan
Group
Loan
First
cycle
Second
cycle
Third
cycle
Fourth and
more
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 2
Beit 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 3
El 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 in
Jenin and 1 in Nablus.
Table 1
The sampling of the clients selected for the focus group is diferently composed between Gaza
and the West Bank clients.
In Gaza, the majority of active ASALA clients have group loans whereas in West Bank the majority
has individual loans. This diference of type of loan may explain the reason why the idea of a
project for a new loan is expressed diferently in Gaza and in the West Bank.
The second diference between the two types of focus group in Gaza and in the West Bank
concerns the number of loan cycles. Indeed, in West bank, most of the clients are engaged in their
frst loan cycle whereas the in Gaza are engaged in second or third or more loan cycles.
9
West Bank FGDs distribution
Type of Loans # of Loan cycles
Local
No. of
clients
MIL SIL IL GL
First
cycle
Second
cycle
Third
cycle
Fourth and
more
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 questionnaire
developed by PlaNet Finance, has been
adapted according to ASALAs specifcities
and to the target group of women active
microentrepreneurs. The survey process was
composed of four main steps:
Initial adaptation by ASALAs team during
project preparation.
Second adaptation following the
organization of 4 focus groups with 6-10
clients in both West Bank and Gaza Strip.
During the focus groups, the questionnaire
was thoroughly tested for cultural and
socioeconomic relevancy.
Final adaptation with ASALA employees
during feld testing. After training,
interviewers delivered the questionnaire to
approximately 20 people in order test the
validity of the questionnaire. This stage of
test of questionnaire development led to
the fnal 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 and
the demand and needs expressed by clients in
terms of current access to loans and new types
of loan products and non fnancial services. The
results of this initiative are intended to provide
guidance to donors and ASALAs practitioners
for making sound decisions to improve their
current microfnance programs.
Qualitative tools:
To gather qualitative data on the needs and
requirements of ASALAs active clients in terms
of existing and potential new fnancial and non-
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What do you think about the current
procedures for having a loan with ASALA?
What types of training and apprenticeship
programs would be appropriate for you?
What kind of non-fnancial 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 difculty in
Between the two diferent approaches of the
study carried out in parallel, a quantitative
survey on client satisfaction and qualitative
Focus Group Discussions, the type of
information collected through each method
may somewhat difer for a number of reasons.
The frst one is a technical reason: due to the
fact that in the questionnaire, most questions
are closed the answer is limited to the diferent
possibilities proposed in the questionnaire.
In contrast during focus group discussions
fnancial services, the research team in charge
of data collection conducted 39 focus groups
discussions with active women borrowers.
Some of the primary research questions the
teams sought to address are the following:
What would you ant to do if you received a
new 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 the
data collection in this research, is that some
respondents may have regarded this exercise
as an inquiry on their behavior, their revenues
or their privacy and therefore may have not
cooperated fully with the interviewers or
provided biased answers. This inevitably brings
the perfect accuracy of the data collected from
such 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), given
the fact that they perceive the focus group
framework as a chance to complain and
motivate changes in ASALAs policies to their
immediate best interests.
For this reason, the information gathered in
focus groups often focuses more on what clients
dislike/want rather than what they would
objectively need to improve their business or
situation through access to new services that
ASALA 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 fndings from
Focus Group discussions.
The second reason is a sociological one: in
a group people are infuenced by others
views and therefore dominant persons tend
to infuence others views. In certain cases
the outcome of group discussions is certainly
more homogeneous due to the fact that the
moment an issue was raised by one of the
participants (such as the current guarantee
procedures or the current cost of a loan, etc),
they issue needed to be debated by the whole
group, even if a number of participants were
not necessary as concerned by those issues as
some others.
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2.1 Characteristics of households and their
activities
2.1.1 Demographics
Age
T
he youngest client interviewed is 18 years old and the oldest 63
years old, however most respondents are between 28 and 45
years old (fgure 2). The majority of women surveyed are married
(85%), while 10% are single, 3% are widowers and 2% are divorced
(fgure 3).
Figure 2
Figure 3
2. Survey results on client
satisfaction in Gaza Strip and
the West bank
85
10
14
Figure 4
Education
Concerning the level of formal education
reached 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
(fgure 3).
But it is important to notice as shown in the next
page (Table 3) that the lack of education afects
mainly the older clients and is signifcantly
lower among respondents between 18 and 30
years old.
Table 3 : Level of Education by Age category
% within Age category
Age 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 profle (household
members living in the same house other than
the respondent or people who depend on the
clients interviewed; such as children, family
members, etc) is composed on average of 7
dependants (fgure 5) per client.
As shown in Figure 6, average clients
contribution per month to the households
budget 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 NIS
for 28% (100-200 USD), 1000 and 2000 NIS for
13% (200-400 USD), and more than 2000 NIS
for 9% (over 400 USD).
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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
diference between clients living in cities,
camps or villages as well as between people
living in West Bank and Gaza.
Figure 7
As shown on fgure 8, trade is the most
important economic activity of ASALAs
clients surveyed in this study (43%), although
the degree to which it is exercised varies by
location.
The second principal activity of those surveyed
is 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
2.1.4 Financial services use and access
Figure 9
Considering loan type (fgure 8), 64% of clients
interviewed use group lending, 30% micro
and small individual lending and 6% Islamic
lending.
A table presenting loan type per location is
presented below. The diference of distribution
between the three types of loans ofered by
ASALA
1
(individual, group and Islamic) is not
substantial. Nevertheless we fnd more group
lending in villages than in cities or camps and
nearly no Islamic lending in villages.
Comparing loan type by region shows that
most clients in Gaza have access to group
lending (88% versus 12% for individual). In West
On average, the last loan received by ASALA
microentrepreneurs participating in this survey
amounts to 1,933 USD, while the average client
has taken 2.2 loans. However average loans
in Gaza, where the majority of clients receive
group loans, amounts to 781 USD while in West
Bank where most clients surveyed received
micro and small individual loans the average
loan amount is of 3901 USD.
Other signifcant diferences in loan amount
can 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

1
ASALAs current product ofer 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
Regarding segmentation by loan cycle, we can observe diferences 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$)
4213 3794 1750 3767 10675 3886
Regarding segmentation by type of activity, agriculture receives the lowest average loan size while
professionals receive the highest.
Regarding segmentation by location, average loan size is similar in cities and camps (around
2100US$) but the average loan size in villages is nearly half (around 1100US$).
18
As these fgures show, the fact that the sample
includes more Gaza clients to refect the
distribution of ASALAs clients between Gaza
and West Bank (240 vs. 141), and that most
of ASALAs clients in Gaza have only received
group loans (Group lending as per ASALAs
procedures allows loans from 200$ 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, Small
loans and Islamic loans (with amounts ranging
from 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 volumes
in West Bank, even if the number of clients
represented in the sample is signifcantly
lower.
2.2 Client satisfaction
In the current context in the Palestinian
Territories, where the continuing occupation,
together with the salary crisis and political
tension has seriously damaged the economic
opportunities of many microentrepreneurs,
ASALAs clients are no exception. The purpose
of this exercise is to focus on those clients of
ASALA that are still active in their businesses
and continue to lend and reimburse their
loans.
For ASALA it is critical to understand deeply
not only the needs of this client base but
also to focus its eforts on listening to these
clients to be able to adapt its current products
and procedures and develop new services to
deepen its position with this critical group
of clients, improve its relationship with them
and assist them in this difcult period. This
survey on clients satisfaction is part of ASALA
strategy to listen to its clients and ensure their
currents and future needs will be met by the
organization.
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 frst aspect that clients value is the good
treatment they receive from the organization
(55% frst answer and 21% second answer).
Other means clients highlight a variety of
personal reasons why they choose ASALA such
as: honesty of employees, help received when
needed, good reputation, etc>
They appreciate as well the fact that it is easy
y
y
(%)
19
and fast to get a loan (10% frst answer and
16% second answer) and the fact that ASALA is
fexible for the repayment (6% frst answer and
12% second answer).
Other elements that clients value in their
relationship with ASALA are: support to
the clients business, access to credit, good
products, its understanding of the client
situation, and fnally the relation of trust
between the organization and the client.
In terms of what clients dislike of ASALA
(fgure 13), 30% (20% as second answer) of
respondents, as may be expected do not like
paying service charges or interest rates; while
29% (5% as second answer) claim that they
dislike the group lending methodology. The
third negative issue is the obligation to provide
guarantors (9% as frst answer 13% as second
answer).
The issue of service charges and interest is a
classic response worldwide, when asking clients
what they do not like about the institution,
they would obviously prefer not to have to pay
service 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 want
higher loan amounts than those provided in
group lending, however lack of guarantors
or ASALAs current policy in Gaza, leaves them
with no option but to accept group lending
with smaller loan amounts available .
Providing guarantors is an obligation which
applies only to new clients who request
individual loans > US$1,500, and may be difcult
to provide in the current context, or it means
people may be indebted to someone else in
the future for having guaranteed them.
Other minor reasons of dissatisfaction are
loan amount (group lending clients would
want larger loans) the location of the ofces (4
main cities in West Bank), the legal procedures
needed to have a loan (court, notary deed
for individual loans) the repayment period,
the installment period, and the installment
amount.
Figure 13
Figure 14
When clients consider the three things that
infuence the most their decision to apply for a
loan at ASALA, they value the following issues
from the most to the least important (fgure
13).
20
31% it because ASALA helps them to improve
their business, 23% as a way to increase their
income, 10% because they needed money and
in order to face the current bad political and
economic situation, 8% in order to launch a
new project and fnally, 4% in order to improve
their living conditions.
Figure 15
The category other includes client statements
on why they chose ASALA such as: it helped
me to feel more independent, the fact that
ASALA cares about women or to complement
my husbands income.
The majority of clients state that it is very easy
(72%) or easy (20%) to become a client of
ASALA (fgure 14).
A few clients state it is neither easy not difcult
to take a loan and only a very small percentage
estimates that its difcult to become a member
(under 2%).
Both clients from Gaza and West Bank have
similar views on this issue.
21
Respondents were also asked to rank the
importance of various aspects of their
relationship with ASALA using the following
scale: 1: Excellent; 2: Good; 3: Average; 4: Bad; 5
Very bad. An average score has been calculated
accordingly
The ranking is nearly excellent in all aspects
with respondents valuing most the easy
access to loan ofcers, and the fact that ASALA
wants to ofer better services, they way ASALA
handles the relationship with clients, following
up on their projects and understanding their
problems when necessary.
Figure 16
What clients fnd more difcult is accessing
ASALAs ofces, although difculty in movement
may have to do with this too.
Figure 17
The ranking of attributes of the services
proposed by ASALA is between good and
average on nearly all aspects: loan amount,
repayment, grace period guarantee, etc.
Rapidity of loan is considered as excellent
together with monthly repayments and access
conditions to loans.
Loan amounts and repayment amounts rank
as good and only guarantees and interest
rates are ranked by clients between good and
average by the majority of respondents.
The issue of guarantees, in particular will be
further explored in the analysis of Focus Group
Discussion results.
2.2.2 Social Impact of participation in
ASALAs program
Clients surveyed perceive diferent impacts
from their participation in ASALAs microfnance
program. In this exercise clients were asked
about impacts at diferent levels: family level,
business level and income level.
Figure 18
ranking)
ranking)
Very easy Easy Neither Diffcult
22
In this exercise the positive impact perceived
by clients is crucial to be able to evaluate how
access to loans impacts their lives beyond being
able to start or invest in their businesses. In the
case of microfnance, where loan amounts are
small, often the increase in income may not be
the only or major impact of having a loan. In
the case of ASALA, whose clients are exclusively
women issues such as increased autonomy,
respect from husband or family, increase ability
to make decisions within the family, etc; are
also of outmost important not only for ASALA,
but specially for the clients themselves.
Figure 19
Figure 20
The perception of respondents regarding
impact on the family due to their participation
in ASALAs loan program is that they have
experienced positive changes for a majority
of clients concerning all indicators except for
savings (fgure 15).
Nearly all of the respondents see a positive
change 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 fnancial issues (84%), in respect from
their husband, children and family (80%),
decision making on family issues (80%) and
reimbursement of previous debts (75%).
69% have notice a positive change concerning
respect from their neighbors and 61% a
decrease in stress. 42% have noticed a change
in their savings.
Regarding the perception of respondents to
changes in their business in relation to their
participation in ASALAs program (fgure 16),
the change has been positive for a majority of
clients concerning all indicators.
Participation has a positive contribution to
expand business (88%) and brought income
for the project (86%).
y p
23
About half have see a positive contribution
to improve quality of the products (58%), to
facilitate the sale of new products, to pay debts
of the business (55%), to allow cost reduction
during input purchase (55%) and to go on new
markets (50%).
Only 35% have noticed a positive impact of
the program to open a new business. However,
this is due to ASALAs policy of targeting
minimum up to 25% start up projects within its
portfolio and to the fact that the group lending
methodology is also a limit for start ups. Few
clients 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 noticed
a positive change in using new suppliers. Yet
in terms of new employees, participation in
ASALAs program has had very little impact
on the number of new employees hired. This
is due to the fact that most micro businesses
are based on self-employment and that any
peak in activity is usually absorbed within the
family.
As shown in the previous graph, 85% of the
clients 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 fgures 17 shows for which purpose clients
have used this extra income.
27% of clients have purchased food with this
income, 22% have reinvested in their project,
18% have helped their family or friends, 13%
have spent in education of their children, and
13% in the improvement of their house. 6%
have used it in health care.
The revenues generated through the micro
business for most respondents are either
reinvested in the business itself or used to
cover basic family needs such as food, health,
education or housing.
24
25
3.1 Findings
A
t the household level, Palestinian women are important
contributors 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, handicrafts
and light manufacturing. For clients, self-employment provides
small earnings and has the advantages of low barriers to entry,
fexibility in terms of time commitments, and is available even
during crises periods.
Despite this, women are more and more engaged in formal
activities such as managing a boutique, a grocery, a beauty centre,
etc.... This access to a formal sector work highlights the major role
that women play inside their family.
The Focus Group Discussions held by ASALAs team highlighted
a number of issues that require further attention by ASALAs
management of how to adapt its current products to the current
context and which new products and services (both fnancial and
non-fnancial) could be explored.
Key fndings from this exercise have been organized in terms of
supply of current services and demand for new services. Both issues
are analyzed in detail in the following section.
3.1.1 Supply of microfnance services
The key fndings on the supply of microfnance services include:
Clients have difculties in complying with ASALAs guarantors
procedure; In particular new clients who request Individual
Loans for amounts over 1500$
3. Analysis of Focus Groups results
on the needs of new nancial and
non nancial services for ASALAs
clients
26
ASALA ought to adapt more to the current
difcult economic situation and confict by
extending the grace period to more of its
clients; In particular group lending clients,
who have currently only one month grace
periods.
Clients would always want lower interest
rates
Clients would be interested in savings
products as well as loans.
3.1.2 Summary on demand for new
microfnance services
The key fndings on the demand side involve a
number of interrelated factors that infuence
existing economic activities or potential new
projects, including:
The need of loans to improve current
businesses.
The need of loans for housing
improvements.
The need of loans for purchasing vehicles.
The need of loans for marriage expenses or
other social activities.
The need of loans to purchase land.
The need of loans to pay back previous
debts.
The need of loans to help familys men in
their business. (Family Loans that includes
men).
This case study presents these fndings with
respect to clients demand for capital and
sources of capital:
ASALAs clients need and want capital.
However, their capital needs are as much for
family needs (i.e. marriage or education) as
for their business;
Microfnance 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 for
a new loan difers between the Gaza and
the West Bank; (see chapter fndings)
3.1.3 Summary on demand for non
fnancial services
In terms of the demand for non-fnancial
services among clients, the key fndings are:
Clients need a package of practice-based
experiential learning opportunities (versus
stand-alone training; on-site coaching may
be particularly useful for clients living in rural
areas or camps which are unable to attend
classroom training in cities, as well as training
in small groups to allow practical learning
Access to mentoring and support structures;
e.g.: More experienced clients could become
trainers for younger or simply new clients at
ASALA. Experienced clients if remunerated
or compensated alternatively could become
a pool of experienced trainers and/or
counseling providers.
Access to fnance including savings and
credit (although not necessarily via MF
providers)
When looking at the holistic needs of clients
concerning small business development, it
is essential to consider non-fnancial themes,
such as:
Building personal skills. Training ranked
as the most important issue to build a
successful business for clients
Networking ranked slightly at the same
position
Marketing their products
Clients recognize also the need for social
help
27
3.1.4 Key programming considera- -
tions from analysis of FGDs fndings
This research refects the fact that signifcant
economic development is not likely to occur
in the West Bank and Gaza under the current
conditions of occupation, lack of access to the
Israeli labor market, and extensive barriers to
trade and commerce.
In this context microfnance becomes
important as it allows ASALAs women clients
to create self employment opportunities for
themselves and earn additional income to
support their families.
The main objective of this research is to develop
programming recommendations for ASALA as
well as broader recommendations on how to
adapt ASALAs microfnance service to better
respond to the needs of its clients.
ASALA has conducted this research with its
clients to analyze the demand for microfnance
services, 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 the
demand expressed by the clients. Non fnancial
activities can be also promoted to engage
clients to improve their business in term of
skills, marketing, etc
3.2 Supply of current fnancial
services by ASALA
The frst step in analyzing the demand is to
understand how women consider the current
procedures to obtain a loan from ASALA.
The research team analyzed the information
gathered on current loans to understand how
clients appreciate the procedures of receiving a
loan. Diferent issues appeared and perceptions
difer between Gaza and the West Bank.
Generally, participants in FGDs argued
that current conditions of loan access and
reimbursement (grace period, guarantee
procedures, etc.) are a constraint to them.
They expressed the need to review some of
ASALAs procedures such as: lowering interest
rates, adapting the grace period procedure to
the economic problems that clients have to
face, allowing the renewal of loans for good
clients regardless of arrears in the group (an
issue raised mainly group lending clients in
Gaza), etc. Some of these issues are analyzed
here in more detail.
3.2.1 Interest rates
The interest rates rank third as a negative point
in ASALAs current procedures. For participants
of focus groups held in Gaza, it is the most
important issue in the micro credit procedures
whereas in the West Bank it is only the third
preoccupation of clients after grace period and
guarantee procedures. Those who mentioned
the problem of interest rate would like ASALA
to reduce interest rates.
28
This issue is linked to the fact that ASALA ofers
diferent product in both regions ( Group
lending and Islamic loans in GAZA, versus
Individual lending in West Bank and higher loan
amount), therefore the diferent importance of
this aspect for each group.
3.2.2 Guarantors procedure
One common fnding which appeared
consistently 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
diferent solutions or alternative procedures to
change the current guarantors procedure.
Even if 6 focus groups mentioned the
possibility of having a loan without guarantor,
the majority of clients who contest the current
guarantors procedure propose other ways to
provide guarantees. The most important one
is to accept checks instead of guarantors (an
important issue for individual loan clients).
Other clients mentioned the fact that other
MFIs 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 of
land and buildings instead of guarantors.
3.2.3 Grace period
According to the majority of the participants
in FGDs, the second main negative point in
ASALAs procedures is the grace period. In
the 14 focus group in the West Bank and 3 in
Gaza strip, clients expressed the fact that it
would be better for them having more fexible
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 confict situation. Some
clients also explain that late repayment is due
to the confict context in the region and that
ASALA ought to adapt its procedures to this
situation 2
3.3 Demand for capital and
purposes for new loans
The second step to analyzing the demand for
microfnance among clients is to understand
the economic activities in which ASALAs
clients are currently engaged and the uses of
the revenues they earn. The results collected
across the FGDs show that clients are engaged
in a broad range of economic activities. There
is a consistent clustering around a number of
income generating activities (IGAs) or types
of employment/self employment (shown in
Figure 1 for clients in the West Bank and Figure
2 for clients from Gaza)
Figure 18: Main
activities of FGD
participants Gaza (# of
clients)
It is important to bear in mind that ASALA has adapted to the current crisis situation. ASALA difered all payments from 1st April to Dec 31st
were difered & up to now in Gaza with no additional charges While in the West Bank, payments have been difered on a case by case basis, when
justifed. ASALA has not stopped disbursing new loans in this period.
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 examples
provide 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-cycle
businesses in the informal or semi-formal sector,
including petty trading, small-scale agricultural
and livestock production, handicrafts and light
manufacturing, such as bakery, embroidery.
In general Palestinian women engage also in
temporary work on government employment
schemes or intensive day labor in agriculture.
Their reliance on informal, short-term sources
of 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 jobs
and earn less due to their
lower education. The report
states that nearly half (48%)
of the working poor work
only sporadically, compared
to one-third (30%) of other
workers.
Another area of broad concurrence across
all FGDs is that many women are pursuing
self-employment, rather than wage labor, to
meet their economic needs. For women, self-
employment provides small earnings and
has the advantages of low barriers to entry,
fexibility 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, or
by trading up to a larger business. Participants
in 10 of 14 focus groups emphasized that they
were looking to earn relatively small amounts
of income while trying to fnish school, take a
technical training course, look for a job, or save
money to start a real business.
3.3.1 Use of future loans
One of the questions that were analyzed in
FGDs with ASALAs clients is, what they would
want to use their next loan for and what sort of
loan would they need.
The research found that ASALAs clients would
use loans for more than one purpose. Capital
needs or working capital for their businesses
being as important as facing family needs.
The priorities vary between Gaza and West
Bank clients. However the needs are the same
30
in term of housing loans, education loans,
marriage loans, purchasing car or improving
their business. What varies is how these
needs are ranked between the two regions.
Marriage ranking as a frst priority in Gaza;
while improving the business ranks as the frst
priority for clients in West Bank.
Before analyzing these diferences we have
to defne a new type of loan that clients
would 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 that
women members of ASALA would want a
mechanism so that their male family members
could also have access to ASALAs microfnance
services, either directly or through their
membership. Currently ASALA focuses only on
female microentrepreneurs.
3.3.2 Purposes for a new loan
In the FGDs held in West Bank and Gaza, the
purposes 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 store
were 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 frst
invested in marriage rather than in improving
existing businesses. Indeed, the frst purpose
expressed for a new loan by the clients in Gaza
would be to cover the cost of marriage and
the last purpose would be to improve their
business.
These opposite views refect the very diferent
situations in which people live in Gaza versus
the West Bank and the diferent attitudes
towards religious beliefs, which make marriage
and 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 the
same 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 is
not precisely identifed. We can only provide
the following fndings on the average amount
expected by the clients for those who consider
a loan to improve their business in the future,
and would want to invest up to: 2500$.
In West Bank the information collected
gives us important fndings on the need for
improving businesses. First of all in terms of
type of improvement and in terms of amount
expected for each type.
Clients who have expressed the need to improve
their business considered diferent possibilities.
For example: improving a grocery store,
31
Figure 3: Purposes for new loans in West Bank (#)
Figure 4: Purposes for new loans in Gaza (#)
opening a new store (requiring key money),
building a new store, opening a bakery, a
boutique or establishing a supermarket.
In the FGDs held in the West bank, 10 groups
expressed the need for a loan in order to
improve their grocery or business, followed
by opening a consumption institution and
building a new store.
For this, the average amount expected would
be of 9,485$ for improving the grocery and
their business, even if the amounts expected
range from 500$ to 10,000$.
The average amount expected to open a
consumption institution is more important:
16,187$. The amounts desired ranging from
2,000$ to 50,000$. The average capital deemed
necessary to start a supermarket would be
30,000$.
3.3.2.2 Marriage loans
In Gaza, in 20 FGDs, the need for marriage
loans was expressed as a purpose for using a
new loan from ASALA. The average amount
expected was 4,987.5$. The highest amount
Number of time requested per 25 Focus Groubs
k
32
requested was 8,000$ and the lowest one
2,500$. The most requested amount was
4,000$, expressed seven times.
While the need marriage loans is the most
important purpose for a new loan in Gaza, it
is in the West bank where the amount for a
marriage loan is the most important. Indeed,
in the 14 focus groups held in the West Bank,
the amount expected for a marriage loan
starts from 5,000$ to 20,000$. Thus the average
amount for a marriage loan would be of
11,400$, refecting the higher standards of
living in the West Bank versus Gaza.
3.3.2.3 Housing loans
In FGDs held in both Gaza and West Bank, the
possibility of having a housing loan is one
of the key issues for clients. Of the 25 FGDs
in Gaza, 25 focus groups had mentioned this
need 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 are
equal for clients from Gaza and from the West
Bank. According to the clients, a housing loan
can mean diferent things however: home
improvement loans, building a new home,
buying an apartment, purchasing a house.
In West Bank the average loan expected for
housing would be 12,414$. However responses
were very diferent, certain clients would need
1,500$ for improving the house, while others
request up to 10,000$ for the same purpose,
it is important to understand what kind of
house improvement they refer to. The loan
expected for housing by West Bank clients
starts from 1,500$ up to 70,000$. In spite of
the heterogeneity of the answers, most of the
responses were around 10,000$.
In Gaza, the average amount would be 5,200$,
while responses would be expressed in a more
homogeneous way. The loan amount required
for housing starts at 2,500$ 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 the
key issues for clients in both Gaza and in the
West Bank. Of the 25 FGDs held in of Gaza, in
21 FGDs the need for a loan to purchase a car
was suggested.
In the 14 FGDs in the West bank, 13 groups
expressed 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 made
regarding loans for taxis. This may require
further clarifcation. It could simply have to do
with the fact that a normal car might be able
to operate as a taxi in Gaza without need for
further investment.
33
The average loan expected difers also by
region. The average loan expected to buy a car
in Gaza would be of 4,333$ whereas it amounts
to 9,833$ for clients from the West Bank. Clients
who would want a loan in order to buy a taxi in
the West Bank expected on average loans up
to 21,714$.
3.3.2.5 Education loans
In both Gaza and West Bank, having a loan for
the education of the children seems to be of
the major preoccupations of ASALAs clients.
For West Bank clients, an education loan is
their third priority, just after loans to improve
the business and housing loans. Indeed, in the
14 focus groups held in this region, 9 focus
groups expressed the need for capital to invest
in the education of their children. The average
amount expected is 2,323$.
In Gaza, the need for an education loan is also
an important issue but it is ranked lower in
the frequency of answers. Thus, the education
loan is the fourth purpose for a new loan
after marriage loans, housing loans and
car loans. However it is still one of the major
issues according to the fact that in the 21 focus
group in Gaza, 11 focus groups, more than 50%
of the clients had expressed their need for an
education loan. The estimation considered
necessary for an education loan in Gaza is on
average 809$.
3.3.2.6 Family loans
The research found that women are important
economic contributors within their families. 9
focus groups in West Bank and 13 in Gaza had
expressed the need for a loan for their husband,
their son or their father. This family loan is one
of the highest loans expected. It is ranked 4th in
terms of priority in both Gaza and West Bank.
In other words, the family loan is as important
as the education loan for clients in Gaza and
nearly equal to education loans in West Bank.
Clients had expressed many ways of using a
family loan. Especially to buy a taxi for their
husband or their son, also the use of the loan in
order to built a house for their son, to buy tools
and furniture for their husband, and to help
their husband to start a new business.
If the purpose for a loan is to help the diferent
type of clients male relatives, the average
amount expected is diferent between the two
regions. In Gaza, the average loan expected is
lower than the average one of the West Bank.
Indeed, in the West Bank the clients want on
average 11,825$ whereas for clients in Gaza,
the amount is 2,958$.
The gap between these two amounts can be
linked to the existence of two very diferent
economic contexts. In Gaza, the idea of helping
their son and husband for ASALAs clients is
limited to open a grocery for their husband or
son, whereas in West Bank, the ideas for helping
their mens family are more ambitious. Indeed,
34
some clients expected from the loan for men
to buy a taxi, to open a computer shop for their
son or to buy a truck, etc.
3.3.2.7 Health treatment loans
Health treatment is another common need
for clients in Gaza and in West Bank. Even if it
is less expressed than the other needs, health
treatment is a major preoccupation for clients.
Some of them have even expressed that the
purpose of such a loan would be to invest in
pregnancy treatment.
Even if health treatment is not the main priority
for clients in terms of loan products it still
concerns 45% of the focus groups participants.
In Gaza, 10 focus groups had expressed the
need health treatment loans and 6 in West
Bank. The average loan considered necessary
for clients in the West Bank is fve time more
important than the average amount for clients
in Gaza. Indeed, in Gaza the average amount
for a health treatment loan is of 2,093$ whereas
in the West Bank the average loan is 10, 166 $.
However the West Bank average is somewhat
biased, by one clients request for 43,000$, which
may be considered exceptional, increasing the
average fgure. Excluding this amount, the
average loan wanted for health treatment in
the West Bank amounts to 3,600$.
3.3.2.8. Loans to repay debts
For clients in Gaza, another major purpose for
a new loan is to pay back previous debts. 10
focus groups expressed the need to use a new
loan to reimburse debts. In terms of priority
it is as important as a health treatment loan.
Clients for West Bank expressed also the need
to reimburse debts with a new loan but only 3
focus groups mentioned this need.
3.3.2.9 Loans for investment in land
For clients in West Bank, agriculture and
the livestock constitute one of the main
occupations of ASALAs clients, purchasing of
land is also considered a priority investment
for ASALA clients. 7 focus groups expressed
the idea to invest in purchasing land with a
new loan estimated on average at 21,500$. In
Gaza only 3 focus groups expressed the need
for 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 fnancial 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
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 related
to their business such as:
Management
Computer skills
Vocational training
On-site counseling on how to improve their
business,
Their main focus was on acquiring skills and to
have access to advice in order to succeed in
their businesses. Capital by itself is considered
insufcient.
3.4 Demand for non fnancial
services
This section presents fndings and analysis on
the need for non fnancial or support services
among ASALAs clients.
During FGDs, clients were asked for their needs
in terms services that they would expect from
ASALA, beyond loans. The purpose of this was
to determine where access to capital lies in
terms of priorities for clients and how it fts with
other development needs. This will provide a
more holistic view of the needs of clients.
The results from the focus group discussion
highlighted the importance that clients give
to several variables that afect the success
of a business as training and coaching in
management, marketing, vocational training,
information and access to new commercial
channels, etc.
36
Most clients imagine would want ASALA to
provide them with services such as a vocational
or entrepreneurship training (due to their lack
of basic skills) such as sewing skills, handicraft
skills, computer skills, language courses in
English or Hebrew.
This illustrates that clients demand a holistic
approach to enterprise development. Terms
such as develop, improve, manage were
used regularly to convey the challenge behind
this training.
There was considerable discussion on the
relative importance of formal training versus
gaining practical experience through learning
by doing. Indeed, several focus groups
participants would want ASALA to have client
advisors who would come to them in their
businesses and advice them to improve their
skills 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 at
ASALA
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 for
training courses in business management and
marketing
3.4.2 Networking
The ranking results show that the creation of
37
a network between ASALAs clients is one of
the main inputs women feel they need to be
successful.
Networking was defned by clients as a way
to rely on each other in order to improve their
business and to fnd solutions to their problems
through this channel
According to the discussion, the need of such
networking among ASALAs clients would allow
a 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 just
providing training support. FGD participants
also spoke about their need to feel supported
by other ASALA clients through a community
of 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 of
their projects.
Clients expressed several ideas to promote
institutional networking and exchange. Some
concrete ideas were suggested such as:
Organizing regular client meetings
A general assembly meeting for all ASALA
clients
Establishing an exhibition hall for ASALA
clients products
Developing ASALAs member services
Developing card membership (allowing
discounts and other advantages)
Networking was also perceived as a way for
increasing sales and marketing opportunities
or even creating new job opportunities at a
later stage for members. Ideas were suggested
to 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 its
clients with the list of good wholesalers and
retailers addresses.
According to clients, consistent support and
coaching seems to be the aspect they want
mainly from ASALA. However, clients clearly
express as well that business skills are better
acquired through practical exposure to running
a business or a series of small businesses along
with other clients considered as colleagues
than by learning via training courses.
The enormous challenge for ASALA is to
fnd ways to truly address the needs and
aspirations of its clients, through exercises
such as this study and to fnd ways to turn
all this valuable information into realities that
address its clients needs.
38
39
t
he 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 pay
for the education for their children, loans for consumption needs or
to fnance their marriage.
4.1 Current loan products
The adaptation of current loan procedures is an issue that was very
present during FGDs. ASALAs clients have expressed their views
on how current loan procedures procedures could be reviewed
concerning a number of issues, the most important are:
Loan amount: Group lending clients, particularly in Gaza, would
want to have access larger loan amounts and individual loans.
Guarantors: the guarantors issue has been highlighted by
Individual loan clients in both Gaza and West Bank, suggesting
an alternative methods could be applied such as accepting land
or property as or checks (as other MFIs currently do) instead of
guarantors. Group lending clients would want a more fexible
procedure that would allow good clients to renew loans
regardless or arrears in the group.
Grace period: Group lending clients consider that the current
grace period is not long enough. Particularly in Gaza, clients
argue that the economic and the political situation need to be
taken into account in order to adjust ASALAs policies in terms of
grace period.
4.2 New loan products
ASALAs clients have suggested in FGDs new ways of investing their
loans in issues that afect their families such as housing, education,
marriage or the support for male family members. This applies
to clients in Both Gaza and West Bank. Besides this a number of
4. Recommendations on
nancial product development
and non nancial services
40
ideas have been proposed to improve current
businesses.
New Business loans: West Bank clients
mainly request capital for opening or
improving stores, boutiques or supermarkets.
The average amount expected for this would
be 16,187$. ASALA would require a strong
analysis on the viability of such businesses
before considering this sort of large long
term loans as well as on the creditworthiness
of clients and eventual guarantees.
Marriage loans: Gaza clients expressed
marriage as the main purpose for using
a new loan from ASALA. The average
amount expected was 4,987$. This sort of
consumption loan could be considered for
clients for the stabilizing factor it may have
on the family, which maybe consider a social
impact of such loans. However, detailed
analysis on the repayment capacity of these
clients would be required. Existing good
clients might be the targets of such a loan
product on a case by case basis.
Housing loans: housing is a key issue for
clients in both Gaza and West Bank. Loans
for home improvement or home building or
acquisition loans would average 12,414$in
West Bank versus 5,200$ in Gaza. Unless
ASALA could modify its current procedures
in terms of guarantees (to accept the new
property as a guarantee) this sort of lending
ought to be out of its scope, particularly
considering that other MFIs provide already
housing loans in Palestine.
41
Health treatment loans: a common need
for clients in Gaza and in West Bank. The
average loan expected for clients in the
West Bank is 3,600 $ versus 2,093$ in Gaza.
This sort of product could be developed
to target existing good clients, where
repayment capacity allows as a new or
parallel 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 could
be developed in two ways. As a debt
consolidation product for clients with
access to individual lending that could
beneft from lower interest costs in this way.
Alternatively where amounts may be small it
could be included as an additional amount
to a normal business loan, where repayment
capacity allows. Existing good clients might
be 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 main
occupations of ASALAs clients in West Bank
and access to land is an important issue
for clients. The average loan expected for
such purpose would be 21,500$ in west
bank versus 15,000$ in Gaza. Such a loan
product, unless ASALA could modify its
current procedures in terms of guarantees
(accepting land as a guarantee) ought to be
out of ASALAs scope or considered only on
a case by case basis.
4.3 Non fnancial services
ASALAs clients have expressed in FGDs
the need to receive training and increase
networking and marketing opportunities in
order 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 of
4,333$ 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$.
Loans for car purchase if it means a business
enhancement or an income generating
activity as well as improving family mobility,
may be a potential new product for ASALA,
in particular if arrangements could be made
with car dealers or leasing companies in
Palestine. Existing good clients might be the
targets of such a loan product on a case by
case basis.
Education loans: In both Gaza and West
Bank, having a loan for the education of the
children is a major worry for ASALAs clients.
The average amount needed would be
2,323$ in west Bank versus 809$ in Gaza. This
sort of product could be developed to target
existing good clients, where repayment
capacity allows as a new or parallel loan to
their existing one.
Family loans: women are important
economic contributors as this research
shows and their concern for their families is
more than understandable and considered
as important as access to education
loans. The average loan expected for such
purpose would be of 11,825$ in West Bank
versus 2,958$ in Gaza. Family loans could
be considered on a case by case basis by
ASALA for a number of new businesses
as a way to empower women within their
families and support their dependents. This
may require an important change in the
policies of ASALA and a major shift in the
orientation of the organization; however in
the current context in Palestine this could
mean an opportunity for ASALA to expand
its outreach while benefting from the
knowledge of its existing client base and
increasing its impact on the households of
its existing clients.
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on-site training or coaching is preferable for
clients to formal classroom training courses.
The development of training materials and
use of external trainers may be a cost that
ASALA would not be able to absorb within
its current cost structures. However coaching
and networking may be activities that could
be further developed by ASALA in a structured
manner by reviewing its client monitoring
processes.
Coaching of clients may be an opportunity
for ASALA to strengthen the role of its loan
ofcers without incurring in additional costs.
In addition ASALA could develop linkages
with other programs existing in Palestine
that provide vocational, business training or
language courses for entrepreneurs.
In addition a network of voluntary business
coaches could be developed by ASALA by
involving successful clients in these activities.
When asked during FGDs, clients were prepared
to cover part of the cost of such training. This
contribution could be used to compensate
voluntary coaches for their eforts.
4.3.2 Networking:
The idea of networking has also been expressed
by ASALAs clients in FGDs as a way to rely on
each other in order to improve their business
and to fnd solutions to their problems.
Beyond coaching clients recognize the need to
learn from each others experiences. A number
of ideas were suggested to improve links
among clients such as regular meetings or a
client assembly.
The organization of such meetings ought to
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 clients
were willing to attend meetings to improve
the organization. Loan ofcers could organize
periodically meetings in ASALAs ofces among
its clients to facilitate such exchanges. Such
meetings may allow ASALAs members to sell to
each other or develop business relationships.
In terms of marketing opportunities, ASALA
could partner with other organizations to
organize exhibitions of ASALA clients products,
enabling clients to sell their products and
promote them to new customers.
Through the recruitment of a dedicated
staf, ASALA could also develop new ways
of increasing the beneft of being an ASALA
member to attract new clients. The ideas
proposed by clients such as negotiating
discounts at wholesalers or retailers for ASALA
members are another example of partnership
with other organizations (the private sector
in particular) that ASALA could develop. Such
schemes are currently developed by MFIs
worldwide. Involving ASALAs board members
in such activities, where possible, may facilitate
the creation of such linkages. In addition
information could be provided by loan ofcers
to clients on which wholesalers or retailers exist
in the area.
According to clients, support and coaching
seems to be the aspect they miss nowadays
from ASALA. The challenge for ASALA is to fnd
new ways to address the needs of its clients.
Exercises such as this research ought to be the
starting point for the development of such
activities.
4.4 Programming
recommendations
The success of the activities proposed in this
research in terms of development of new
products and services for ASALA depends
on two key factors, the commitment of the
organization and the external support it may
receive.
In terms of the internal eforts 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
ofcers and branch managers
Developing the capacities of its staf to
provide coaching to clients and non fnancial
services or raise fund for a specialized
separate unit for Business Development &
Networking for the women entrepreneurs.
Involving successful clients in the coaching
process in diferent areas
New microfnance products could include
small, short-term consumption loans,
educational loans, and emergency loans with
fexible repayment periods.
As mentioned previously in this research, clients
demand is diverse and it difers between clients
from Gaza and West Bank. What is appropriate
to one group of clients will not be appropriate
for another.
Donors can support demand studies and
product development and innovation initiatives.
Such support could allow ASALA to launch and
test training and counseling activities directed
to its clients to prepare the launch of new non-
fnancial microfnance services at a later stage.
44
Training activities may involve fnancial literacy
training, training on marketing products,
business development services, networking
and personal skills development.
ASALA should develop non fnancial services
in order to help its clients develop sustainable
businesses. The design of such programs
however should be carefully monitored to
ensure that the fnancial sustainability of ASALA
is not compromised.
In order for ASALA to develop non-fnancial
services in a large scale, a separate unit should be
created with its own staf and fnancial resources
for the development and management of
such services. The development of non-
fnancial services should not compromise the
sustainability of ASALAs loan program so it
needs to be funded separately from revolving
fund operations.
In terms of the external factors that afect
ASALAs a number of issues may be critical in
ASALAs 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-
fnancial services such as formal training
Changes in current legislation
Donor support
Donor support will be critical in the future for
ASALA to reach its goals of outreach, product
diversifcation 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
efective way to increase the outreach and
quality of its microfnance products in current
underserved areas of Palestine.
Funding programs: a donor funded a
special loan fund for new products (such
as education loans or emergency loans
with longer repayment terms for women
in difcult situations, etc) could be the
mechanism to support outreach and
product diversifcation for ASALA as well as
other Palestinian Microfnance organizations.
Alternatively a loan guarantee scheme for
such new product could also be used.
Technical assistance: capacity building in
the development of new programs, training
for women entrepreneurs & loan ofcers in
coaching and counseling of clients as well as
vocational trainings for microentrepreneurs
are areas in which donors can have an
immediate impact in improving the quality
and diversity of non-fnancial services for
Palestinian microentrepreneurs
Advocacy: involvement of donors in the
improvement of regulation of MFIs may
be another of direct impact for donors
in their support to ASALA as well as other
Palestinian MFIs. Changes in regulation
allowing collection of savings may have a
dramatic impact in improving the fnancial
sustainability of MFIs as well as on product
diversifcation and outreach to clients.
Finally supporting ASALAs in the growth and
diversifcation of its portfolio will allow not only
increase the number of women benefting
from microfnance services in Palestine but also
ensuring its fnancial sustainability.
ASALAs clients and its families need access to
new fnancial and non-fnancial services from
ASALA to improve their businesses their skills
and living condition of their families and to
face the difcult context in which they work
and live in Palestine.
45
ASALAs responsibility is to listen
to their needs and grow as
an organization to meet their
demands. ASALAs challenge
in the next years will be to
undertake the necessary eforts
to turn its clients needs into
realities.
Donor support will be critical in
order for ASALA to increase its
loan capital and succeed in its
eforts.
46
Region Address Phone Fax E-mail
Ramallah and El
Bireh
Al Irsal Area , Saber
Tawil Building, next to the
Ministry of Tourism, Mail
Address Ramallah P.O Box
2316
02/2400532
02/2409460 02/2402433
asala@palnet.com
shireen@asala-pal.org
mary@asala-pal.org
Gaza
EL Rimal, Al Jala and
Wihda streets Intersection
, Bseiso Building, P.O Box
5099
08/2843778 08/2843778
asala-g@palnet.com
samy@asala-pal.org
Deir El Balah
By Abou Saleem Mosque,
Maher Al Masri Building
08-2538240 08-2538240
asala-g@palnet.com
samy@asala-pal.org
Beit Hanoun
Main Street, Across the
UN school, Sultan Al Masri
Building
08-2456370 08-2456370
asala-g@palnet.com
samy@asala-pal.orm
El Nuseirat
Main Street, Maher Al
Tabba Building
08-2551240 08-2551240
asala-g@palnet.com
samy@asala-pal.org
Jabalia
Main Street, Atallah Abou
Jalala Building
08-2450650 08-2450650
asala-g@palnet.com
samy@asala-pal.or
Nablus
Aloul and Abu Salha Build--
ing, 3rd foor
09-2398175 09-2398117 Beruit_2@hotmail.com
Bethlehem
Jerusalem Hebron St, Aabda
building, Above Al Mashriq
insurance company
02-2753919 02-2753919 ihassasneh@yahoo.com
Jenin
Yahya Ayash circle, Al
Basateen Building, near the
Magistrates Court
04-2505480 04-2505480 Majd-majdoline@yahoo.com
Asala Offces and Braches
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