Support the development of microfinance in Israel in order to fight poverty and financial exclusion.
CONTACT USMicrofinance in the United States started in the 1980s as a means of fighting poverty and promoting entrepreneurship. The target populations of microfinance institutions are minorities, women, and new immigrants. Today, there are 650 microfinance institutions, including 198 providing financial services with an average loan size of US$ 7,166.
In France, microfinance also began in the 1980s as a means of fighting the socio-economic problems related to chronic and long-term unemployment. The main French microfinance institutions, ADIE, provides micro-entrepreneurs with loans of up to EUR 5,000 or US$ 25,000. Microfinance in France has received large public support and today institutions are accompanied by government social funds. In Israel, a new member of the OECD, microfinance is at its nascent stage with few programs dedicated to providing financial services to the poor and to very small enterprises. With a lack of adapted methodologies and products, and the limited outreach of existing programs, microfinance has a well-defined real role to play as a tool for the alleviation of poverty.
Being part of a worldwide network of experts in microfinance, PlaNet Finance Israel thus acts as a facilitator, envisioning microfinance as a powerful tool to foster socio-economic change:
Microfinance is inclusive by essence. Arabs, Jews, Ethiopians, Bedouins and new immigrants - all are potential beneficiaries of microfinance services. This inclusive characteristic is a crucial element in Israel where economic development leaves aside large parts of the population because of their ethnic, religious background or origins.
Being excluded of the banking system in a country not only reflects the condition of the poor but also points at the flaws of economic, financial and social environment of the country. PlaNet Finance Israel strives to help establish microfinance in Israel through linking all parts of society by bringing support and new opportunities to existing structures. By helping develop financial services accessible to all, support local socio-economic initiatives across the entire range of the Israeli population and bring awareness to poverty issues and means to alleviate it, PlaNet Finance Israel is an active supporter of social change.
Financial services for poor people have proven to be a powerful instrument for reducing poverty, enabling underprivileged populations to build assets, increase their income, and reduce their vulnerability to economic stress, while responsibilizing and empowering them, thus reducing their dependency on governmental subsidies. In Israel, a country where philanthropy and charity are deeply entrenched in people's cultural and religious habits and where NGOs are multiplying by the year (27,000 registered NGOs to date), aid to development mostly takes the form of grants, thus clearing beneficiaries from any obligations towards their donors and leaving aside financial education, while perpetuating dependency on philanthropy and charitable organizations.
Microfinance, on the contrary, brings a sense of responsibility to the beneficiaries, who are required to report on their use of money and meet deadlines for repayment, thus empowering them and injecting a sense of responsibility over their own actions.
To educate and to accompany beneficiaries is key to success, as most of them have scarce or no education in financial matters. Both education and new behaviours are needed alongside microfinance and with the help of its international network and expertise.