The Role of Microfinance Institutions and its impact in empowering Small and Medium Enterprises in the West Bank in Light of COVID-19 Pandemic: Ramallah and Brieh as a Model

Abstract

Small and Medium Enterprises (SME) are considered one of the most important firms that support the national economy, either by providing jobs for thousands of citizens, and its ability to limit poverty and unemployment levels, or by producing products and buying the industrial companies and agencies’ products and goods, but Corona pandemic had stormed the stability of these enterprises, which considered the need to provide finance and support from Microeconomic establishments. Accordingly, the study aimed at identifying the role of Microfinance Institutions (MFI) abd their impact in enabling small and medium firms in Ramallah and Berieh governorate in light of Coroma pandemic, to achieve these objectives, descriptive and analytical methodology were applied by designing two questionnaires, where the first one was distributed among all employee who work in MFIs that consisted of (113) male and female employees who work at various administrative levels in MFI head office and banches, while the second questionnaire was distributed among SME located in Ramallah and Berieh governorate that had benefited of microfinance programs due to Corona pandemic, which consisted of (322) firms, the study tool had been tested for its reliability and consistency. The findings showed that there is a high degree of needs among SMEs in Ramallah and Berieh governorate from working employees at MFIs with (74.8%), where the highest ones related to the financial needs, while the lowest one was the managerial development. On the other hand, the findings showed that there is a high degree of needs from SME views with (75.0%), where the highest one was the financial needs, while the lowest one was the efficacy of empowerment methods and procedures, the study revealed that there was a high degree of problems and obstacle the SMEs face due to the spread of Corona virus with (74.8%) from employees in MFI views, where the highest one was interrupt the supply of products, while the lowest one was the difficulties of marketing products, it also showed that there was a high degree of the efficacy of MFI programs with (71.6%), where the highest one was (sustainability program) while lowest one was (displacement program), the findings showed that MFI programs have a high degree of the ability to help SME and empower them from MFI employees’ view with (71.4%), and a high degree from small and medium firms with (74.6%). The study revealed that there is positive and statistical significant role of MFI programs to (fill SME needs, solve the problems and obstacles that SMEs face, and to empower these firms) from MFI employees’ views in Ramallah and Berieh governorate due to the spreed of Coronavirus pandemic, where if the implementation of MFI programs increased by one degree, the ability to (fill SME need, solve the problems and onstacles that SMEs face, and to empoiwer these firms) by (0.641, 0.672, 0.852) degrees in sequences, it also found that there is a statistical differences between MFI employees’ answers toward the ability of microfinance programs to help small and medium firms in Ramallah and Berieh governorate to empowering them with the spread of Corona pandemic according to the institute name variable, in favor of (Faten, Asalah, Ebdaa’) institutes, and there was no statistical differences due to (institute capital, the highest level of financing small and medium firms, institute’s programs), it also found that there was no statistical differences between SME answers toward the ability of microfinance programs to help these firms in Ramallah and Berieh governorate to empowering them due to the spread of Corona pandemic according to their personal variables (gender, project field, the amount of finance, period of finance). The study recommended SMEs to benefit from MFIs financing programs in Ramallah and Berih governorate, it also recommended MFIs to develop their programs, methods and procedures to assess sustainable development and to ensure stability and continuity of SMEs.