‘$100m Kuwait fund loan will be used to finance SMEs’

AMMAN — The Central Bank of Jordan (CBJ), in cooperation with the Ministry of Planning and International Cooperation, on Monday announced an agreement with the Arab Fund for Economic and Social Development (AFESD), under which the latter would provide the government with a second loan worth $100 million.

The CBJ will re-lend the loan to banks and micro-financing companies working in the Kingdom, which will, in turn, re-lend it again to micro-, small- and medium-sized enterprises, the Jordan News Agency, Petra, reported.

The loan comes after the government's success in the management of the first World Bank loan of $70 million and the first AFESD loan of $50 million, which both benefited more than 11,000 projects and led to generating 2,600 jobs by the end of 2015.

The CBJ issued a circular to notify banks, encouraging those willing to participate in the effort “in line with clear and transparent criteria”, and published the message on its website (www.cbj.gov.jo) to enable entrepreneurs to have a first-hand look at requirements and lending conditions.

The central bank will also publish a list of the financial institutions involved, so that would-be beneficiaries would apply to these lenders, Petra added.

The CBJ has implemented several procedures to provide and enhance the infrastructure necessary to support the financing sector through expanding the bank’s oversight to include the micro-finance companies, enhance the protection of end users and disseminate a financial awareness culture in society, according to Petra.

In cooperation with the Jordan Loan Guarantee Corporation, the CBJ will establish a fund for loan guarantees for small- and medium-sized projects, which could have a positive impact, Petra said, as it is expected to boost the chances of targeted enterprises to receive financing, and, subsequently, boost the financial, economic and social stability in the Kingdom.