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Law of creating microfinance banks contributes to development process, according to economists and academics

February 23, 2021
finance & economy

Many economic researchers, academics , human rights and trade union personalities have unanimously agreed on the importance of Law No. 8 of 2021, which allows the establishment of microfinance banks. They consider it as a qualitative step in the microfinance sector, which started for the first time in 2001, securing the necessary financing for small producers, mini business owners, and limited and zero income people.

Law No. 8 aims at achieving financial access for the largest possible segment of low income and no income people who have the ability to engage in an economic activity but cannot access banking financial services.

Hassan Al-Hazouri, Professor at the Faculty of Economics at the University of Aleppo, said in a statement to SANA that microfinance banks will have a major role in pushing the development process forward more than the role of public and private banks. The new law allows them, along with financing, to provide insurance services, transfer of funds within Syria and training in addition to offering financial and economic advice.

On the desired role of microfinance banks, Maan Dayoub, Professor at the Faculty of Economics at Tishreen University affirmed that Syrian economy needs to attract foreign capital and companies to employ them in the field of microfinance so creating new job opportunities. He indicated that there are several countries that have followed the same method to achieve sustainable development after surviving devastating wars such as Japan and Germany. These countries achieved great success through turning small projects into giant investments.

Dr. Rola Ismail confirmed that setting up the aforementioned banks contributes to finding solutions to the aggravating economic problems such as high unemployment rates and recession and relieving pressure on the budget by securing job opportunities for graduates. She considered that most of the problems facing small and micro enterprises lie in securing financing in the absence of guarantees.

The local community also has an important role in encouraging the establishment of small and micro enterprises, according to the committee and credit official in the Local Development Office and the “My Project” program in Sweida, Walid Al-Hamoud. He underlined the urgent need to recycle development capital, noting that small enterprises are the least vulnerable to failure and risks due to the keenness of their owners not to waste their resources and invest them in an optimal manner.

In the same context, Eng. Muin Al-Saleh, head of the Agricultural Engineers Union in Homs, indicated that the new law encourages home, medium and small agriculture, and contributes to achieving self-sufficiency among the people of the countryside as well as securing the needs of the local market. Dr. Muhammad al-Masri, Dean of the Faculty of Agriculture at Al-Baath University said that the largest beneficiaries of the law are the limited income people who were able to establish small projects that generate good income for them and their families. He called for focusing on small agricultural projects to reduce the prices of products.

With the aim of preparing banking cadres to work in the field of microfinance, Dr. Ammar Nasser Agha, Dean of the Faculty of Economics at the University of Damascus revealed that the college is preparing to hold a professional diploma course in microfinance targeting those wishing to enter the labor market to serve this important banking sector.

Dr. Nasser Agha stressed the importance of training, building banking capabilities and providing advice to customers and others to secure additional income for them in order to enhance the economic and social dimension and to achieve sustainable development.