The credit barrier in the Arab community

The credit barrier in the Arab community

Even in times of routine, regardless of the COVID-19 crisis, small businesses in Israel face numerous obstacles. One of the main problems of small businesses is funding and credit. One of the reasons for the credit problem is the “suspicion” attached to small business owners, and the conception – erroneous of course – that they are “bad” clients who do not repay loans. All small businesses in Israel suffer from this barrier, but it is much worse in the Arab community. For example, the data shows that more than 72% of the small businesses in the Arab sector have difficulty raising funding, versus 35% in the Jewish sector.

An article by Lana Warwar, "The National Economy: The Difficulty of Small Businesses in the Arab Community in Israel: the Credit Barrier," was published in the ninth issue of Manbar. Almost all of the Arab-owned businesses in Israel (95.8%) are actually small businesses. This fact worsens the grave picture that arises from the data in the article that describes a substantial cash crunch. This problem is a critical stumbling block for entrepreneurs who want to start businesses or expand existing ones. This actually blocks economic prosperity in the Arab community, which could have made a significant contribution to the economy as a whole (because small businesses also pay the investment back to the state in various ways, from taxes to raising a responsible and economically independent generation that leads to reducing dependence on welfare allowances).

The article proposes that the state invest resources and thinking in the subject, build a detailed plan to correct deficiencies, and establish a long-term policy. It should encourage the development of small businesses in the Arab community, in the understanding that the success of small businesses in the Arab community will help the whole economy thrive and promote the economy and welfare of the entire country.

Needless to say how important and relevant the subject of the article and its conclusions are today.

Published: July 28, 2020
Written by: Yael Shalev-Vigiser
Photo: Benjamin RascoeTim Mossholder

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