1. Providing Smart Microfinance in Palestine
Palestinian People Economic Empowerment Program (DEEP)
Providing Smart Microfinance in Palestine
Presentation for ISLAMIC MICROFINANCE FOR POVERTY ALLEVIATION AND CAPACITY TRANSFER (IMPACT) PROGRAM
Tuesday, December 04, 2018Tuesday, December 04, 2018

2. Palestinian People Economic Empowerment Program (DEEP)
More than 13,000 poor families economically empowered.
Over 32,500 job opportunities were created
Tuesday, December 04, 2018

3. DEEP Microfinance Goals
Empowering vulnerable and marginalized people to start new businesses or to strengthen existing ones.
Job creation through self-employment and the promotion of family work and create new jobs.
Help entrepreneurs in the marketing of their products.
Find new investment opportunities for them.
Tuesday, December 04, 2018

4. DEEP Microfinance Goals continued…
To remove financing burden of repayment and lending costs that do not match their income.
Contributing to the growth of the national economy, where small businesses make up 95% of the total Palestinian projects.
Development of renewable financing techniques to meet all the needs.
Create sustainable empowerment financing approaches.
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Tuesday, December 04, 2018

5. Implemented Financing Models
Qard Hasan ( free interest loan)
Murabaha ( cost plus predetermined profit)
Istisna’ (order to producer a specific Asset )
Salam (Forward Purchase)
Musharakah Mutanaqisa and Mudaraba
Tuesday, December 04, 2018

6. DEEP - Qard Hasan Process
1. MFI & Beneficiary determine the financing needs
2. Feasibility Study ( MFI&Ben.)
3. Financing Application by the Ben.
4. Disbursing the First Part of Qird Hasan.
5. Follow Up the use of Financing to disburse the rest on 1 or 2 installments.
Tuesday, December 04, 2018

7. Qard Hasan for New Graduates in Gaza
Electronic Center
Tuesday, December 04, 2018

8. DEEP Murabaha (cost-plus financing)
Date
DEEP Murabaha (cost-plus financing)
Suited for working capital and general assets and goods financing.
Involves the sale and deferred payment for assets.
Purchasing goods from supplier and selling them to families with cost plus.
MFI could negotiate quality and price with suppliers by wholesale purchasing for many beneficiaries.
Islamic Finance: Legal, tax and accounting challenges

9. 1.DEEP Murabaha Process Financing Decision
1. MFI & Beneficiary determine the financing needs
2. Feasibility Study ( MFI&Ben.)
3. Financing Application by the Ben.
4. Purchase order
Ben MFI
5. Financing decision (MFI)
Tuesday, December 04, 2018

10. 2.DEEP Murabaha Process Possessing the Asset
1. Purchasing Promise
Ben. MFI
2. Procure suppliers offers (Ben.&MFI)
3. Purchasing contract (MFI & Supplier)
4. Possessing the Asset (commodity / Product/Tool).
5. Pay the Supplier
Tuesday, December 04, 2018

11. 3. DEEP Murabaha Process Selling the Assets
1. Sign Murabaha contract
2. Activate collaterals
3. Selling the Asset to Ben.
4. Deferred installments to the MFI
Tuesday, December 04, 2018

12. Murabaha Financing example
Tuesday, December 04, 2018

13. DEEP Istisna’ and Parallel Istisna’
Istisna’ more suitable for the not ready products.
Istisna is a sale transaction where commodity is transacted before it comes into existence.
Istisna’ could economically empower two beneficiaries at the same time. (The beneficiary and the manufacturer).
Import and export products can be specially designed on Istisna’ basis.

14. 1. . MFI & Beneficiary determine the financing needs
DEEP Istisna’
Istisna’
1. . MFI & Beneficiary determine the financing needs
2. Feasibility Study
( MFI&Ben.)
3. Submit Istisnaa App.
4. Financing Decision.
5. Financing decision
Tuesday, December 04, 2018

15. DEEP Parallel Istisna’
Parallel Istisnaa
1. Searching
for the manufacture
2. Signing Parallel Istisnaa contract.
3. Manufacturing and deliver & receipt of goods
4. Handle the goods to the beneficiary
Tuesday, December 04, 2018

16. DEEP Istisna’ Example
Tuesday, December 04, 2018

17. DEEP Salam and Parallel Salam
Pay all the price of the goods in Advance.
Product must be identified, quantified, and Measured with quality.
Place, date of delivery, time, must be mentioned in advance.
Parallel Salam: MFI may sell goods, before the date of delivery.
Salam is very powerful for marketing and exporting.
Piloted and will be expended
Tuesday, December 04, 2018

18. Salam Example : Maftoul (Couscous)
Raw Materials- Financed by Advance Purchase
Woman Cooperative
Delivers Maftoul to MFI
Exports to EU
Salam (Advance Purchase): Access to Markets

19. DEEP Individual Musharaka
Piloted Musharaka and Mudaraba with Individuals.
The Pilot face difficulties for the main following reasons:
The beneficiaries are not well tracking the daily transactions.
The associated follow up is very expenses.
Some of the beneficiaries were cheating.
Tuesday, December 04, 2018

20. DEEP Musharaka Group Financing
Prefeasibility study for the business idea.
Discussed and approved through a special committee.
Conduct a Business Plan for the business idea.
At the same time, discuss the partnership opportunities with the private sector.
Tuesday, December 04, 2018

21. DEEP Musharaka Group Financing
Prepare for the new enterprise legal documents, internal regulation, hierarchy, registration etc.
Enterprise Financing, then guiding, and mentoring.
Return back the financing amount form the enterprise profit.
Exit to the benefit of our partners.
Tuesday, December 04, 2018

22. Musharakah University Model
Design the Partnership with the University.
Choose with the University and the MFI, the business idea that serve the new graduates and the local community.
Interview the new graduates to choose our partners.
Tuesday, December 04, 2018

23. Musharakah University Model
Conduct Prefeasibility Study.
Conduct Business Plan.
Choose motivated graduates.
Initiate the enterprise and rotate the graduates.
Return back the financing amount form the enterprise profit.
Handover the enterprise ownership to the University in a condition that the university will rotate more graduates.
The enterprise will be a training center for other university students.
Tuesday, December 04, 2018

24. Thank You for listening
Jazakum Allah Khairn
Tuesday, December 04, 2018