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Microfinanza Rating (MR) has awarded UNRWA Microfinance Department (MD) grade “A+” in the field of Social Performance Management

21, Dec, 2017

Microfinanza Rating (MR), the leading rating agency in the world has awarded UNRWA Microfinance Department (MD) grade “A+” in the field of Social Performance Management (SPM) to be the first Microfinance Institution (MFI) in Palestine and MENA region and amongst only 5% of the total 570 surveyed in the world.


This SR reflects the strength of the SPM and Client Protection (CP) systems to achieve MD social objectives and the desired change on the lives of the marginalized groups including women, youth and Palestine refugees. The Social Rating (SR) is another success of the MD since it was launched 26 years ago in oPt as a small institution that disbursed a few dozen of loans, but now is becoming the second largest MFI in Palestine. This success is a direct result of the management and staff commitment to the MD social mission through providing inclusive financial services to marginalized groups including women, the poor, youth and Palestinian refugees.


The reason behind qualifying the department to receive such rating was the continuous development of SPM and CP systems through adopting the universal standards in these two fields. As a result, the department achieved its goals and social indicators and has produced impact in the lives of its clients. In 2017, 27% of the MD clients fall below national poverty line and 62% of which improved their situation compared to 2014.  In addition, MD success will be an incentive for other MFIs in Palestine and MENA region to work hard to achieve similar results. It is also an important message to donors that despite the prevailing crisis in Palestine, there is a chance for success, excellence and achievement of social mission and goals. This will motivate donors to increase funding to support the microfinance industry in Palestine while at the same time pushing decision makers to support MFIs by promulgating laws and regulations that enhance MFIs ability to survive and succeed.


The following is a summary for the main results of the SR:

  • The MD average loan size is the smallest amongst all MFIs in Palestine, ensuring that MD does not deviate from its social mission to serve the marginalized and poor.
  • The rural areas represents 45% of the total lending in 2017 and more than 75% of the provinces in the West Bank and Gaza are covered.
  • The percentage of access to financially excluded groups (who did not obtain a loan from banks) reached 71% in 2017, of which 81% are women.
  • As for the impact of participation in microfinance loans, 72% of small and micro entrepreneurs improved their net income; 33% of women felt empowered to take financial business decisions.
  • The percentage of financial inclusion of youth is highest among marginalized groups, with 78% stating that their first loan was through UNRWA's microfinance department.
  • The over-indebtedness percentage is relatively small at less than 10, as more than 90% of clients have no other loans from other MFIs. This reflects the strict application of the CP procedures to protect them and prevent falling in the debt trap.
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