The Significant Demand for Microfinance in Syria
This paper discusses unmet demand for microfinance services in Syria, and describes government efforts to boost microfinance. It highlights key challenges that the sector faces and recommends possible solutions.
In February 2007, the Syrian government introduced the General Microfinance Decree, the first of this kind in the Middle East and North Africa region (MENA) in order to improve access to financial services for the poor. The state and NGOs have been the most important players in Syria's microfinance sector. Developing microfinance in Syria is difficult. Hurdles that the Syrian microfinance sector faces include:
- Convincing customers looking for Islamic banking products that microfinance is sharia-compliant;
- Demand exceeding supply with more people wanting loans than the amount of loans available;
- Existence of a sizable shadow or black economy;
- Lack of capacity in terms of trained staff.
The paper suggests that main actors in Syrian microfinance take up activities for training and awareness building, networking, creating alternative models for microfinance and technological innovations in order to develop the sector.