Thousands of young Palestinian entrepreneurs are set to benefit from the UN-backed loan program.
The young entrepreneurs will receive access to financial loans to support their new businesses.
The UN-backed initiative called as “Mubadarati” loan programme will seek to stimulate the creation of new jobs in the Middle East.
The “Mubadarati” loan programme will be carried out by the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) in collaboration with Silatech.
Silatech is an innovative social enterprise, established to address the critical and growing need to create jobs and economic opportunities for young people, starting first in the MENA region where the world’s highest rate of youth unemployment exists.
During the signing of the partnership, representing the Commissioner-General of UNRWA Peter Ford stresses that the initiative responds to the desire and demand of youth throughout the region to end their exclusion.
He notes that both UNRWA and Silatech are committed to policies of economic empowerment and financial inclusion that will enable Palestinian youth to play their full economic and social role in the societies in which they live and work.
According to UNRWA, there are a significant number of young Palestinians between the ages of 18 and 30 who wish to start new income generating projects but are not able to get access to microcredit.
UNRWA reports that young Palestinians face the perennial ‘catch-22′ problem of not being able to start a business without a loan, but not being able to get a loan without a minimum of three months’ business operating experience.
To close this gap, the UNRWA-Silatech partnership will provide loans to young people while at the same time reducing the risk in lending to start-up businesses.
Silatech’s guarantee will reduce the degree of financial risk incurred by UNRWA, allowing the agency to give out millions of dollars in additional loans to help youth start new business ventures.
“Mubadarati” is the first youth start-up loan product to be offered in the West Bank and Gaza, while the Silatech loan guarantee is the first of its type in the Arab region.
UNRWA reports on December 2011, the rate of unemployment among refugees registered with the United Nations in the Gaza Strip in the occupied Palestinian territory stands at 33.8 per cent, indicating that their participation in the labour market has declined despite growth in the construction industry.
UNRWA also sounded the alarm that the unemployment rate in the occupied Palestinian territory is one of the highest in the world, standing at nearly 30 per cent.
Unemployment reached a record 45.3 per cent in Gaza between July and December 2007. Meanwhile, the unemployment rate in the West Bank was 25 per cent, double the average rate in the Middle East and North Africa region.