The Women’s Cooperative of Deir Bzei, Palestine

22 May 2012 at 14:24 5 comments

Philip Issa | KF17 | Palestine

In my last post, I examined the extent to which the lending programs of Kiva’s Palestinian partners FATEN and Ryada can be said to empower women. One characteristic that both programs share is that they only make individual loans. But microfinance doesn’t have to be done at the individual level, and there can be significant advantages to adopting a group lending approach to empower marginalized social groups. With this in mind, I’m excited to introduce you to the Deir Bzei Women’s Cooperative. They’ve leveraged microfinance to finance initiatives that support their members and benefit the women and children of their community.

Introducing the Deir Bzei Women’s Cooperative (24 members not pictured)

Deir Bzei Women’s Cooperative

I visited the Women’s Cooperative at their meeting house in Deir Bzei. It’s a large house with a spectacular view of the valley below. The main entrance opens up to the valley, and, sitting in the parlor with 10 women and only one other man (the loan officer), I have to admit that I felt a world away from the patriarchal order outside.

In microfinance terms, the cooperative functions as a Village Bank for microlending. An outside microfinance institution lends money to the cooperative, and the cooperative in turn lends to its 30 members. In this manner, the cooperative’s members manage all lending decisions and set the terms for repayment.

The Women’s Cooperative is partnered with the Arab Center for Agricultural Development (ACAD, a non-Kiva MFI) to finance its lending program. ACAD takes precautions normal to the village banking model to ensure that its funds are repaid, but these precautions tend to benefit the cooperative and its members, as well.

Fundamental to the Village Banking model is that members create compulsory savings accounts at the cooperative. This establishes a pool of collateral in case a member defaults, and in effect, the group is self-insuring from the perspective of ACAD. It’s a powerful security that allows ACAD to lend at 4-5% interest annually, lower than typical rates for individual microloans. But it also serves as an important step on the way to allowing the cooperative to become a self-sufficient members-only lending institution (akin to a credit union), and it mandates savings, a benefit that I will discuss later.

The view from the cooperative’s meeting house

ACAD trains the cooperative members in best microfinance practices so that they can manage the lending program independently. After the initial training period and the establishment of by-laws for the lending program, a loan officer will meet with the management of the cooperative every three months to collect data on new loans and repayments and to provide technical assistance. Through training and continued partnership with ACAD, members of the cooperative gain hands-on experience with financial management and accounting. This is especially valuable for women in rural areas, who face many barriers to entering the traditionally male-dominated financial profession.

The Women’s Cooperative has disbursed loans to its members that are typical of microfinance: loans for farming, husbandry, sewing, and other such entrepreneurial purposes. But this cooperative also makes loans that the other two village banking cooperatives that I visited do not: loans for education, home improvement, and medical expenses. These loans are distinctly family oriented, and I could tell that the male loan officer would have preferred that more loans went towards “productive” projects. But from the standpoint of women’s empowerment, this is exactly what we would aim to see happen – the recognition that non-entrepreneurial projects are also deserving of credit.

One cooperative member took out a loan to purchase beekeeper equipment after divorcing her husband. Divorce has potentially negative ramifications for a woman’s ability to access credit. Individual microloans often require a guarantor’s government salary as security. Since social capital in Palestine is developed largely through the husband (and, in the case of women, since being married is an important status symbol in itself), women tend to lose many of the relationships they may need to secure a loan or enter the working world after a divorce. But this was not the case of the beekeeper member of the Women’s Cooperative, who was able to secure her loan by virtue of her savings account and the trust of her fellow members. Plus, she got a loan for beekeeping equipment – how cool is that!

Besides financing the individual loans made by the cooperative, ACAD also makes one large loan a year for a cooperative-owned project. For the past two years, ACAD has financed ⅓ of the costs for the Women’s Cooperative to open a supermarket in the village, with the remaining investment coming from members’ savings accounts. The cooperative owns and manages the market, providing members with valuable management experience as well as income to replenish their savings accounts and invest in other initiatives.

The Deir Bzei Women’s Cooperative supports its members and its community in other ways, as well. Some of their initiatives include a cafeteria program, which employs members to cook healthy lunches for a local school and nearby orphanage, and a weekly class for adolescent girls. The class covers social and gender-specific topics, business and financial principles, and healthy child-rearing practices.

Advantages of the Village Banking Model

Linda Mayoux writes in an analysis of microfinance that while it has the potential to empower women, it equally has the potential to marginalize them and reinforce existing gender roles unless careful design approaches are taken. Women may be excluded by their male relatives from management of the loan, from income generated by the loan, or from ownership of the assets purchased with the loan. Women who do secure the earnings from their loan activity may find that they then have to cover lost male earnings, as the men devote less of their income to household expenditures. Women who work and demand more say in the household may face severe pushback from their husbands. Women may continue to be excluded from certain work sectors or forced to abide by norms that limit ability to lead a business, manage employees, and interact with customers.

The best strategy for empowering women through microfinance, Mayoux writes, is to make it a primary objective and not subsidiary to poverty alleviation or operational sustainability. This means incorporating women’s voices and the objective of empowerment in all parts of the lending relationship between institution and borrower. Should loan oversight be strict to keep the money in the hands of the borrower instead of her husband? Or should it be lax, to allow a borrower to support her family in a time of emergency? Should loan sizes be small to avoid attracting the attention of the husband? What interest schedule works best for the borrower? Should there be an emphasis on savings, or do existing informal networks suffice? What complementary services, if any, should be provided? Might mandatory group meetings unnecessarily eat into the time of women borrowers to tend to household duties? How should ownership of assets purchased with a loan be secured in the woman’s name? What loans best serve to improve the lives of all members of the household and allow women to assume leadership roles at home and in new sectors of business? And so forth.

The beauty of the village banking model is that it leaves many of these lending decisions in the hands of the borrowers. ACAD itself does not emphasize women empowerment – as its expanded name suggests, its focus is agriculture – but by entrusting many of its traditional responsibilities as a lender to the Women’s Cooperative, the objective of empowerment is strongly incorporated into the structure of the lending program. Furthermore, the compulsory savings program secures lending resources and all associated income from it in the hands of the women. Once money enters a savings account at the cooperative, the ACAD loan officer explained to me, no one but members of the cooperative has a right to access it – even husbands cannot access it.

Whether through lending to members who otherwise may not be able to access loans, supporting the educational and medical expenses of members’ families, providing hands-on experience in accounting and business management, financing members to enter male-dominated sectors, providing a safe meeting space for members to meet, cooking healthy meals for local schools, or teaching a weekly class for teenage girls, the Deir Bzei Women’s Cooperative has certainly taken full advantage of its resources to empower its members and support its village.

Further Reading

Mayoux, Linda, 2002. ‘Microfinance and women’s empowerment: Rethinking ‘best practice’’, Development Bulletin, no. 57, pp. 76-81.


Philip is a Kiva Fellow working with FATEN and Ryada in Palestine. Fund their loans to women here.

Entry filed under: KF17 (Kiva Fellows 17th Class), Palestine. Tags: , , , , .

Nomads: How Much Longer? A Funny Thing Happened on the Way to a Borrower… Part 1


  • […] The Women’s Cooperative of Deir Bzei, Palestine « Kiva Stories from the Field  |  22 May 2012 at […]

  • […] The Women’s Cooperative of Deir Bzei, Palestine Philip Issa | KF17 | Palestine In this installment, Philip introduces us to a group of female borrowers that have formed their own lending cooperative. Through his article, Philip teaches us a little more about the “village-banking” lending model and we learn about some of the advantages of this methodology. […]

  • 3. Chuck Kleymeyer  |  24 May 2012 at 06:17

    Many interesting points are made in this post. I commend your work!
    Two Questions:
    1. Does Kiva take the next step and serve women as a group that truly works together as a full group rather than a grouping of individual lenders? Examples might be women planting a community forest together to protect the watershed on a hillside above their gardens/farms; or women buying and managing a water pump as a group, to produce several harvests a year rather than one rainfall-dependent harvest.
    2. Does Kiva have a definition and a theory of “empowerment”? Everyone uses that term (in many different ways) and almost no one offers a definition or a theory! I myself work in the field of grassroots development and have been doing so since 1966. I’m currently working on such a definition/theory, and I have not found a single other instance of such an effort (except maybe a circular definition which essentially says “empowerment is any activity that makes people stronger and more able to act effectively” — that’s like saying “happiness is increased by living joyfully.” Yup, it sure is. But how?).
    So, if you have anything written on this, please share it with me… We all work and live, based on definitions and theories. The problem is they just aren’t conscious or well-thought-out ones. And that gets us into lots of trouble and cuts down on our successes.
    None of the above, of course, detracts one iota from the good work that Kiva is doing! I’m merely pushing you…
    Be Peace,
    Chuck Kleymeyer
    (member of Langley Hill Friends Meeting)

    • 4. Philip  |  30 May 2012 at 08:30

      Hi Chuck, thanks for the comment! I’m glad to have such a thought-provoking reply to my post.

      I believe that Kiva supports groups that take out loans in a cooperative manner but I can’t say that with certainty. Kiva instructs its partners to describe all group loans by focusing on the loan use and story of one borrower. This is for practicality’s sake – it keeps group profiles succinct and it promotes a sense of personal connection between the lender and borrower, which is a major attraction for many lenders using the site.

      At the time of my writing this reply, a search for groups of women fundraising for agricultural loans turns up 10 results:
      Of those, two descriptions could be twisted to presume that they are in fact cooperative loans in disguise: the San Luis de Cumbe Communal Bank (, which, importantly, seems to be a village bank; and the Taman Indah Group (, whose profile says that the group has a farming business and raises livestock. Truthfully, though, I think it would be a stretch to assume that the Kiva loans are supporting cooperative projects even for those two groups – Still, even village banks lend to individual members (like the cooperative I described in my post), and supporting those individual loans frees up funding for the village bank to finance its cooperative projects.

      Should this policy change? Perhaps. I’m not privy to Kiva’s internal deliberations (for that matter, I’m not speaking on their behalf – I’m simply conveying my understanding of their policies) so I don’t know if there is an initiative in the works to more explicitly advertise loans for cooperative projects on the site. But Kiva is a young and dynamic organization. Its youth may explain why it is rather narrow in its group lending offerings – only 6 years ago, Kiva was an idea that had yet to attract a strong lending base, so it focused on simple loan connections. Now a reputable organization, Kiva is showing that it is willing to advertise less conventional, sometimes riskier loans on its site, and its staking future expansion on it. There are an increasing number of clean energy and higher education ( loans on the site, and they’ve partnered now with two MFIs to lend ( and Is village banking next? It’s certainly possible. (Heck, village banking may have already happened and I’m just not aware of it).

      With regards to empowerment: Kiva does recognize partners who stand out for their empowerment practices through its Family and Community Empowerment social performance badge ( Per the badge’s description, empowerment seems to be defined as providing someone with the services (education/medical/financial or others) that are sufficient to exit poverty and stay out of poverty, regardless of what events transpire in their lives. That is, a microloan alone that allows someone to start a successful business does not count as empowering if a negative life event (e.g. a divorce, being forced to move, illness in the family, death in the family, domestic violence or the threat thereof…) deprives someone of income for the rest of their lives. I suppose these negative events have to be within reason. And I may be projecting on behalf of Kiva too strict a definition of empowerment. In this blog post (, about why Kiva allows some MFIs – particularly in the Middle East – to allow male relatives stand in for women, Kiva seems to think that every successful loan transacted on its website can be chalked up as an act of empowerment.

      I’d be interested in knowing what definitions of empowerment you’ve come across and what you think most appropriate. Please share your thoughts!


  • 5. Najla  |  23 May 2012 at 20:50

    Great, inspiring post! A breath of fresh air in the often over-heated and oppressing atmospheres of the Middle East

Get Involved!

Learn more about this blog and about Kiva Fellows


Apply to be a Kiva Fellow

Enter your email address to receive notifications of new posts by email.

Join 1,347 other followers


Drawing from the Field

Kiva Blog Policy

%d bloggers like this: