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palestine asala microfinance proparco garantie france
Proparco's portfolio guarantee of $1.3 million will enable Asala to continue its efforts to empower the most vulnerable entrepreneurs in Palestine. It demonstrates Proparco's commitment to supporting the private sector in fragile countries and strengthens its presence alongside microfinance institutions (MFIs) in Palestine and the MENA region.

Certain categories of entrepreneurs, such as women, youth, and rural residents, face greater challenges during economic downturns and are often underserved by financial institutions. Yet these actors are essential to the economy and their successes have an immediate impact on their communities. That is why Asala, an MFI established in Palestine in 1997, deliberately targets these segments (women make up 70% of their clients) and aims to fill their funding gap.

To support the MFI in this ambitious undertaking, Proparco has just signed its first operation with Asala, consisting of a $1.3 million portfolio guarantee. This risk-sharing mechanism will enable Asala to support more than 40 businesses and create or maintain more than 120 jobs.

To date, more than 20,000 clients have benefited from Asala's loans totaling $100 million, as well as capacity building sessions. Asala is currently the fourth largest MFI in Palestine and has demonstrated its ability to meet the needs of a growing clientele throughout the country, despite a challenging environment.

In order to reduce the risks taken by Asala when financing SMEs and VSEs, Proparco has set up a portfolio guarantee called ARIZ TPE which is supported by the French government. This risk-sharing mechanism is mainly aimed at SMEs and VSEs operating in crisis areas. It covers a large number of small loans, thus facilitating access to financing for companies with a high risk profile in difficult environments.

"We are very proud to work with Asala, our third MFI client in Palestine, through our ARIZ SME tool dedicated to entrepreneurship in vulnerable areas. This new project is another illustration of Proparco's renewed commitment to support the private sector in Palestine, where we have invested US$ 148 million over the past 6 years. The special focus on women is a perfect illustration of AFD Group's global strategy in favor of gender equality", said Françoise Lombard, Proparco's Chief Executive Officer.

"We are proud to launch this new initiative with Proparco to support entrepreneurs in vulnerable SMEs and VSEs. Asala is committed to bridging the financial inclusion gap for SMEs and MSEs, particularly those owned by women. This is a major step towards empowering entrepreneurs who are at the heart of the Palestinian economy," said Rasha Qawasmi, Asala's Executive Director.

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