Introduction

Following the closure of all banks soon after the Israeli occupation in 1967, there was little formal financial intermediation in the West Bank and Gaza Strip (WBGS) for almost 26 years. The few bank branches that operated in the WBGS in the period 1967-1993 were mainly deposit collection outlets with very little lending. Most savings of WBGS Palestinians in this period were kept as currency holdings or in financial institutions outside the WBGS, particularly in Jordan. Informal finance played a major role in this period. Money changers accepted deposits, arranged currency transfers and extended credit. Non-governmental organisations (NGOs) provided subsidised credit, particularly in the agricultural sector.