$10m granted by EBRD to support MSMEs access to credit

AMMAN — The EBRD (European Bank for Reconstruction and Development) is partnering with Jordan Commercial Bank (JCB) to support the development of small businesses in Jordan with a $10 million financing package.

A $10 million credit line will be used for on-lending to local micro, small and medium-sized enterprises (MSMEs), which are the backbone of the Jordanian economy, the ERBD said in a statement e-mailed to The Jordan Times on Tuesday.

Access to finance remains a challenge for Jordan’s MSMEs, despite the fact that they account for 95 per cent of active firms in the country; MSMEs provide 70 per cent of total private sector employment and generate approximately 40 per cent of gross domestic product.

 “We are very happy to partner with JCB to support lending to MSMEs. We consider MSMEs the backbone of the economy and a priority sector to develop as it contributes significantly to employment and economic growth,” Heike Harmgart, EBRD director for the Eastern Mediterranean region, was quoted in the statement as saying.

Caesar Qulajen, CEO of Jordan Commercial bank, said in the statement: “The MSMEs segment plays a major role in the development of the economy, especially in light of its vast role in combating poverty and unemployment indicators. The biggest challenge for this segment in Jordan is to obtain financing for their MSMEs projects. The signing of this agreement stems from our belief in the importance of supporting this segment and strengthening its projects and ensuring its continuity.”

The European Union is providing grant support to this transaction as part of a broader initiative channelled through the EBRD and other partners. The EU Financial Inclusion Initiative is a comprehensive programme to help MSMEs in the southern and eastern Mediterranean region to become more competitive and grow. It provides finance and know-how to boost development and create jobs, according to the statement.

Andrea Matteo Fontana, EU ambassador in Jordan, said in the statement: “Thanks to our longstanding and fruitful cooperation with the EBRD, we are able to facilitate access to finance for dynamic entrepreneurs, in particular women and young people, in order to create new jobs in Jordan.”

Jordan became an EBRD country of operations in 2012. To date, the EBRD has committed over $1 billion to 40 projects in Jordan.