When the latest Israel-Gaza conflict broke out in 2023, it sent shockwaves across the Palestinian territories. While the devastating humanitarian crisis in Gaza rightly commands global attention, life in the West Bank has also been profoundly affected, though often less visibly.
The reality for many Palestinians in the West Bank today is one of deepening insecurity, economic hardship, and an overwhelming sense of uncertainty. Checkpoints have multiplied, movement is increasingly restricted, and incidents of violence have risen. These restrictions have led to profound social isolation, with many people going for months without seeing family and friends who live just a short distance away. The constant fear of detention or harassment at checkpoints prevents them from making even the most basic journeys, eroding community ties and daily life. For small business owners, many of whom provide essential goods and services in their communities, it has become harder than ever to earn a living or even plan for tomorrow.
A region in crisis
The economic and humanitarian situation in the West Bank has deteriorated significantly:
- Unemployment: The unemployment rate in the West Bank surged from 12.9% before the conflict to 32% by mid-2024, with approximately 306,000 jobs lost. Source: UN Trade & Development
- Economic Contraction: The West Bank's economy contracted by 25% in the first quarter of 2024, with trade, services, construction, and manufacturing sectors experiencing the most significant declines. Source: United Nations
- Movement Restrictions: The number of movement obstacles in the West Bank increased by 23% between June 2023 and March 2024, reaching a total of 793, including checkpoints, roadblocks, and other barriers. Source: UN OCHA
- Violence and Displacement: In 2024, Israeli forces and settlers killed 499 Palestinians in the West Bank. Settler violence reached unprecedented levels, with 1,420 incidents causing casualties or property damage—a 16% increase from the previous year. Source: Norwegian Refugee Council
How Lendwithcare has responded
At Lendwithcare, we temporarily paused lending across the Palestinian territories when the conflict escalated in late 2023. We also made the decision to pause all loan repayments to give our local partner, Reef Finance, time to assess the impact of the conflict on their borrowers. Very quickly it became clear that loan collections in Gaza would be impossible, so we took the extraordinary step of writing off all loans in Gaza. In the West Bank, loan repayments have not been collected until very recently when we have started to see a small number of repayments come back to lenders. However, access remains challenging in the West Bank and the impact of the Israel-Gaza conflict on households and small businesses is huge.
Over the past 20 months, we’ve remained in close contact with Reef, supporting their efforts to understand the evolving situation and explore how to safely resume lending. Together, we’ve decided that now is the right time to restart a small number of carefully considered loans to entrepreneurs in relatively safer parts of the West Bank. Despite the ongoing challenges in the West Bank, many Palestinians need to restart their income-generating activities to support their families and provide essential goods and services to their communities. It is no longer viable for them—or for our local development partner—to wait indefinitely for the conflict to end. After a thorough risk analysis, we believe this cautious step is a meaningful way to support economic resilience and offer entrepreneurs a chance to rebuild their livelihoods in extremely difficult circumstances.
The situation in the region is so unstable that it has been challenging to find the right time to restart support for entrepreneurs in the West Bank. Just recently, on 10 June, in retaliation for Western sanctions including from the UK, Israeli Finance Minister, Bezalel Smotrich, announced the cancellation of a key banking waiver that allows Israeli banks to process shekel transactions with Palestinian banks. If implemented, this move could cripple the Palestinian banking system, cutting off the financial lifelines that households and businesses rely on. Many of the small business owners supported by Lendwithcare in the West Bank started their ventures precisely because salaried employment is so vulnerable to political and economic restrictions. This latest threat could further limit their ability to access capital, pay suppliers, or stay afloat. However, we feel like now more than ever, it is vital to support entrepreneurs while financial channels remain open, before the window to act closes completely. Please note that supporting a loan in the West Bank is likely to carry much greater risk of default.
New loans supported through Lendwithcare will be offered only to long-standing Reef borrowers who have demonstrated a clear ability and commitment to run viable businesses. However, we want to be transparent and highlight that these loans come with a significantly higher risk than usual.
Due to the ongoing conflict, widespread restrictions, and the fragile security situation, there is a real possibility that loans may be repaid late, or may not be repaid at all. The future in the West Bank is deeply uncertain, and we recognise that this is not a typical lending environment.
We know this may not be a decision every lender feels comfortable with. But we also know that many of you will want to stand with these entrepreneurs who are trying, against all odds, to hold onto their livelihoods and rebuild their futures. Though the risks are high, so too is the impact of your support. Showing an individual in the West Bank that you believe in them, and still share their hopes for their future, is a powerful act of support.
We expect profiles to start being available for funding in July 2025 here.