Law, finance students discuss prospects, challenges of cooperative and development banking in Palestine
Jamal Odeh, head of the Non-Banking Financial Institutions Regulation Division at the Palestine Monetary Authority, discussed the realities and challenges of development and cooperative banking in Palestine in a lecture on Wednesday, April 24, 2019.
Organized by the Muwatin Institute for Democracy and Human Rights at Birzeit University as part of a research project into cooperatives, the lecture focused on whether development- and cooperative banks could serve as a viable alternative for the current financial systems in Palestine.
Odeh opened the lecture by highlighting that the monetary authority’s interest in the subject stems from its role as sector regulator, noting that the organization has commissioned studies to explore whether there is a need for development banks in the Palestinian financial sector.
The role that would be played by development banks − a category that includes cooperative banks, among other financial institutions − in Palestine, asserted Odeh, is already fulfilled by the numerous microfinance organizations in the country.
Odeh noted that if development banks were to exist and function in the financial sector, however, they would provide lower interest rates than microfinance organizations because these banks demand collaterals for loans they give to borrowers − something that microfinance institutions do not require.
At the end of the lecture, the students discussed whether development banks should register as for-profit or nonprofit institutions and whether banks should be required by law to offer microfinance services as part of their obligation to the economic development of a country.