Banyan Global operates seamlessly within four practice areas:
Banyan Global worked with the Microfinance and Microenterprise Department (MMD) of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) to expand savings services for Palestinians in the West Bank and Gaza. Savings are an important mechanism to help households withstand crises, and an important way for UNRWA to grow and raise capital. We conducted market research on savings practices and demand, assessed UNRWA's legal and institutional options, and presented a series of recommendations for moving forward.
The crisis in the occupied Palestinian Territories has had a severe impact on households. Launched in 1991 in the West Bank and Gaza in response to high unemployment and increasing poverty, the Microfinance and Microenterprise Department (MMD) of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) has successfully improved the poor's access to a range of microfinance products and services.
The MMD is the largest microfinance institution in the territories. The current crisis, however, is affecting people's ability to repay, and loan defaults are taking a toll on MMD operations. The department also wants to expand its product base to meet immediate client needs, and is particularly interested in offering savings products to poor Palestinians. Savings are an important mechanism to help households withstand crises, and an important way for UNRWA to grow and raise capital.
UNRWA commissioned Banyan Global in 2007 to conduct a savings product feasibility study. Banyan Global worked with UNRWA to conduct market research, analyze the legal options for UNRWA to introduce savings products, and assess MMD's internal capacity to enter a new line of business.
On the demand side, Banyan Global found limited perceived ability to save among Palestinians given the crisis and the ensuing pressure on livelihoods and business activities. However, the study also revealed a substantial willingness to save. Respondents were already saving in informal ways, despite their perception that they are not doing so. Families aspire to open accounts for their children, when and if they can afford to, to save for their education and future. Families also hope to save for future unforeseen events.
While the current economic climate has limited people's ability to save, many continue to do so in informal ways, notably through rotating savings and credit associations and continued investments in housing, land, and income-earning projects. When the economic situation recovers, the ability to save will match people's willingness to do so, leading to significant demand for savings products. Previous crisis events, such as the second Intifada, were instrumental in instigating many households to save. It is expected that the current crisis will continue to build on that societal change.
With regard to legal options, Banyan Global presented UNRWA with a series of immediate and mid-term institutional frameworks. UNRWA is studying these alternatives, in light of its eventual goal to transform into a regulated financial institution. Institutionally, UNRWA is one of the strongest organizations in the territories and has the capacity to lead the microfinance industry into the savings market, with additional investments to improve and expand its staffing capacity and its risk management practices.