Study on Options, Management, and Enforcement of Collateral for Microfinance Loans in the West Bank and Gaza Strip

Reviewing collateral options and legal enforcement issues for microloans
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This study provides a detailed review of collateral options and related legal enforcement issues in the West Bank and Gaza (WBG). It aims to assist microfinance practitioners (MFP) in adapting products and delivery mechanisms suitable to address the protracted economic crisis in WBG. Using information from literature review, documents, interviews and focus group discussions, the study reports findings like:

  • Effective use of collateral options is limited due to legal and enforcement challenges;
  • MFPs are not fully informed of potential collateral options and their applications;
  • Credit risk mitigation techniques suitable to WBG, such as character and capacity assessment and group lending can be improved;
  • Linkages and leasing where receivables and leased assets are used as collateral have high potential;
  • Key stakeholders, MFPs, clients and non-clients are willing and open to adopting innovative collateral options, given complementary changes in legal and enforcement mechanisms.

Finally, it makes recommendations, at the retail, meso and macro levels, for the expansion and management of collateral options for microloans in WBG.

About this Publication

By Hishigsuren, G. , Husseini, H.