AMMAN –– Planning and International Cooperation Minister Jafar Hassan on Tuesday urged local banks to facilitate financing to small- and medium-size enterprises (SMEs) in the country.
Although SMEs have a vital role in boosting Jordan’s economy, they suffer from a shortfall of available financing resources, he said, indicating that small- and medium-scale projects receive less than 10 per cent of overall credit facilities extended by financial institutions.
At a conference on financing SMEs, organised by the Jordan Enterprise Development Corporation (JEDCO), Hassan explained that the contribution of SMEs to gross domestic product is around 40 per cent, and accounting for nearly 70 per cent of created job opportunities.
Around 99 per cent of business establishments in the Kingdom are SMEs, according to the minister.
Noting that the loan guarantee programme covers around 75 per cent of the credit to help SMEs in governorates obtain easier lending, Hassan called on banks to facilitate the JD3 billion available at lending institutions as excessive liquidity.
JEDCO Chief Executive Officer Yarub Qudah told attending experts and entrepreneurs that as of February 15, SMEs can apply to benefit from loans under the programme from the Arab Bank and the Cairo Amman Bank, adding that five more banks are expected to join the programme in the coming weeks.
“The programme is a real and exceptional opportunity to spur economic and development growth in the Kingdom”, he added.
Qudah mentioned that despite financing challenges, SMEs contribute to around 45 per cent of Jordanian exports, adding that when SMEs apply for loans, banks require high collaterals in addition to charging high interest rates with short maturity periods.
Amman World Trade Centre Chairman Michael Nazal indicated that SMEs in Jordan and elsewhere face financing challenges that restrict their development.
