EBRD, FCI hold conference to promote factoring, supply chain finance in Jordan

AMMAN — The European Bank for Reconstruction and Development (EBRD), FCI and the Association of Banks in Jordan held a conference on 29 April to promote the understanding and use of factoring and supply chain finance in Jordan – essential tools for unlocking trade.

The event attracted experts from the EBRD, FCI, legal practitioners and industry specialists, who gave participants a comprehensive overview of the evolving landscape of factoring and supply chain finance. They also discussed the importance of regulation, risk management and collaboration in developing these markets, according to a statement.

Speakers highlighted the benefits of factoring and supply chain finance for small and medium-sized enterprises (SMEs), such as flexibility, risk mitigation and enhanced liquidity. They also shared case studies and real-world experiences to show how these tools support trade, businesses and economic growth.

Director and Regional Head of the Eastern Mediterranean Region at the EBRD Gretchen Biery talked of the role the Bank can play, saying “The EBRD can make a significant contribution to regional economic development. By fostering a robust market for factoring and supply chain finance, the EBRD can equip Jordanian companies, particularly SMEs, with the working capital they need to thrive. This, in turn, will fuel domestic growth, boost regional trade and contribute to Jordan’s economic potential.”

Director General of the Association of Banks in Jordan Maher  Mahrouq explained how banks need to embrace new financial tools. “As we navigate an ever-evolving global economy, it becomes increasingly imperative for banks to explore innovative financial instruments that can facilitate trade, empower businesses and drive economic growth. Factoring and supply chain finance are indispensable in this endeavour,” he said.

Head of Finance Companies and Credit Bureaus Supervisor at the Central Bank of Jordan Maha al Abdallat emphasised the importance of strong regulatory frameworks in supporting factoring and supply chain finance in Jordan, commenting “The Central Bank of Jordan will continue to work on developing legislation, regulations and supervisory frameworks in line with international standards and best practices. This will help improve the spread of financial services and encourage innovation in these services, ensuring they are offered with high quality and at reasonable cost.”

Speakers also shed light on the EBRD’s Trade Facilitation Programme and SME Finance & Development, underlining the role these initiatives play in promoting economic growth and fostering financial inclusion, the statement noted. 

The EBRD TFP was established in 1999 to promote international trade between the economies in which the Bank operates, through guarantees and short-term loans to selected participating banks and factoring companies.

Since 2012 the EBRD has provided more than €2 billion through 71 projects in Jordan, of which 71 per cent are in the private sector, including financial support to the Jordanian banking sector through MSME loans, subordinated debt and trade finance facilities.

The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiatives in 36 economies across three continents. The Bank is owned by 73 countries as well as the EU and the EIB. EBRD investments are aimed at making the economies in its regions competitive, inclusive, well-governed, green, resilient and integrated.