Monday, October 22, 2007

Spreading the Money Around

But who is watching it?

Microloans Help Businesses Expand in Palestinian Territories

Washington -- Receiving a series of small loans, a woman living in Beit Jalla on the West Bank was able to expand her sewing business from a sole-person, home-based operation into a thriving venture employing up to 10 seamstresses and bringing more income to her family.

The borrower’s loans were among the 72,000 made by local lender FATEN (Palestine for Credit and Development) with a total value of approximately $43 million. FATEN has disbursed microfinance loans to entrepreneurs, mostly women, in the West Bank and Gaza since 1995. FATEN is now independent, thanks to a $15 million investment from the U.S. Agency for International Development (USAID) and nurturing by the international nonprofit group Save the Children.

USAID's current efforts to support the economic development of the Palestinian Territories are focused on a microcredit organization known as SMART (Small and Microfinance Activity for Recovery and Transition).

...U.S. economic assistance to West Bank and Gaza has come in other forms.

A $228 million Middle East Investment Initiative (MEII) loan fund launched in July is a collaboration among the U.S. Overseas Private Investment Corporation (OPIC), the U.S.-based nongovernmental organization Aspen Institute and the Palestine Investment Fund.

The initiative aims to provide low-cost loans to small and medium-sized businesses that otherwise might not have access to investment capital. The funding from the Aspen Institute is raised from donors in the United States, Europe and Arab countries. The Norwegian government contributes $5 million for the fund’s operating costs.

...In fiscal year 2007, USAID invested $50 million in Gaza and the West Bank. The Bush administration has requested an increase to $77 million for the next fiscal year, Sumka said.

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