CBJ launches company to ‘solve funding problem for startups’

AMMAN — Prime Minister Omar Razzaz on Sunday launched the Innovation Startups and Small and Medium Enterprises Fund (ISSF) with a capital of $98 million to fund and support entrepreneurs in Jordan. 

The private joint stock company is owned by the Central Bank of Jordan (CBJ) and Jordan Loan Guarantee Corporation (JLGC) and aims at supporting 825 projects, 150 of which will be startups through direct and indirect funding and constant technical support, its CEO, Muhab Murar said.

The project will support women and youth, he said, noting that “25 per cent of the [fund’s] targeted groups are businesswomen and another 30 per cent are youth.”

The executive added that investment will be directed to a wide variety of sectors, including technology, media, telecommunications, services, agribusiness, pharmaceuticals, water and green energy. 

The capital is secured through a $50 million investment from the World Bank (WB) and $48 million from CBJ. 

During the launching event at the CBJ headquarters in Amman, Razzaz said that the ISSF will solve the funding problem facing startups.

Entrepreneurship and innovation cannot be taught, but can be acquired at an early age if children are raised in a culture that encourages this trend. 

Tania Mayer, WB’s representative in Jordan said that innovative startups and SMEs are usually the main player in creating job opportunities and in enhancing economic growth, agreeing that financing is the main challenge facing Jordanian startups. 

Citing a WB study, Murar said that such challenges have led to a drop in the rate of startup creation in Jordan to seven startups a year for every 10,000 people of the working age population, comparing to 26 in other developing countries. 

ISSF’s Chairman and JLGC’s General Manager Mohammad Jafari pointed out that startups should be considered the first option for investment as they are key job generators.

CBJ Governor Ziad Fariz said that the ISSF is part of the bank’s Financial Inclusion Strategy, covering the aspect of venture capitals. 

Fariz said that the CBJ, in cooperation with Planning and International Cooperation Ministry has succeeded to supply $400 million during the last four years to fund SMEs. “CBJ has received $240 million so far and lent it to 15,000 micro, small and medium sized projects” he noted.

On the other hand, CBJ created new funding programmes with competitive interest rates, 1 per cent interest rate on funds provided to startups working in governorates, and 1.75 per cent to start ups working in Amman, Fariz said, noting that 882 projects have benefitted from these funding programmes, which have so far created 8,400 jobs.