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This study aims to propose potential policies that can be used as tools to empower Palestinian female entrepreneurs and enhance Palestinian female participation in the economy.  It also explores the obstacles that Palestinian female entrepreneurs face when starting entrepreneurial ventures, in addition to the

challenges that affects. The growth and development of entrepreneurial projects.

 This study benefited vastly from the research and findings of two main surveys: the Adult Population Survey (APS, 2009) which was sponsored by the IDRC and used by the Global Entrepreneurship Monitor (GEM), as well as the survey conducted by MAS (2005), ‘Female Entrepreneurs in the West Bank and Gaza Strip: Current Situation and Future Prospects’.

 The importance of studying female participation in MSMEs stems from the fact that almost all female entrepreneurs are involved in MSMEs rather than large enterprises, which makes this business sector more representative of female entrepreneurs. The rate of female involvement in MSMEs, however, is lower than that of males in most parts of the world, especially Palestine. The fact that MSMEs have the potential to expand and to be a source of future economic growth and job opportunities makes it crucial to understand the reasons behind such low rates of female involvement as well as to find the most proper and effective tools and policies to encourage female participation.

 In general, females involved in MSMEs ownership and management are middle-aged to elderly, married or divorced, less educated and live in rural areas. Female entrepreneurs are also mostly of middle-income groups, self or part-time-employed and work more in the private sector than in the public sector. Furthermore, women who have received training on how to start a business are more prone to be involved in MSMEs.

 Willingness to start a project was highest among women with vocational diplomas (74%), followed by those with academic diplomas (71%). This percentage declines for women who have finished a bachelor’s degree or higher (59%) and is even lower among women who just have a basic education (53%). Consequently, relatively more educated women without university degrees are more likely to start their own business. Opportunity factors make female  entrepreneurs more likely to establish businesses in urban areas than in rural areas and  refugee camps. Female entrepreneurs also face challenges that stem from local culture, customs and traditions, in addition to limited property rights, among other things

 Many females who tried to start a business stumbled upon financing problems.  Consequently, the need for financial support was by far the most important issue raised by the women surveyed, with over half (50.7%) stating that they would need external funding to launch a project. Secondly, 28.1% of female respondents said that they would require support from family and community members. Regarding the need for training, 16.1% of women sampled mentioned the need for technical training and 9.7% identified a need for administrative and marketing. Training 13.7% said that social conditions and attitudes would need to change for them to start a business, and only 9.7% said that they would need more self-confidence.

 In addition to the various obstacles to entrepreneurial venture financing faced by women, Palestinian female entrepreneurs face obstacles specific to their situation, particularly on the regulatory level. It is important to note that various regulations and policies that have attempted to encourage female entrepreneurship have failed in the past. A reform of the investment promotion law, in addition to other commercial laws, is required to successfully promote female involvement in MSMEs.

 Occupation is a heavy cost for all aspects of currently operating entrepreneurial activities. On account of the limits imposed by the occupation, it was found that 63.5% of female entrepreneurs sell their products only in the villages or the towns they live in, while only 2.7% of female entrepreneurs export their products outside Palestine. As with female entrepreneur run start-ups, 31% of female entrepreneurs reported that enterprise financing was the main obstacle to success,, followed by transportation costs (22.1%) and marketing problems (18%). Female-headed business marketing is also among the factors in need of improvement. Some of the main obstacles faced by business start-ups include: acquiring financing sources (61%), insufficient skills (33.25%) and family hostility towards female initiates (21.23%). Furthermore, when Palestinian female entrepreneurs face problems, they mostly turn to their husbands (40.7%), relatives (20.3%) and/or specialized institutions (30.3%).