Jordan made 'significant progress' in developing entrepreneurship, innovation – World Bank

AMMAN — The World Bank has confirmed that Jordan has made “significant progress” in developing its entrepreneurship and innovation ecosystem through initiatives aimed at supporting startups, enhancing digital transformation, and integrating technology into key sectors. 

The World Bank noted that funding challenges remain a major barrier to the expansion of these companies.  

According to an evaluation report on the project supporting startups and small and medium enterprises (SMEs) through the Jordanian Innovation Startups and SMEs Fund (ISSF), reviewed by Al Mamlaka TV, the World Bank highlighted that Jordan’s venture capital sector has witnessed remarkable growth in recent years, making it one of the fastest-growing markets in the Middle East and North Africa.  

Between 2018 and 2022, Jordan ranked fourth in the region in terms of total venture capital funding, securing $246 million, following the United Arab Emirates ($4.4 billion), Saudi Arabia ($1.9 billion), and Egypt ($1.4 billion).  

As part of efforts to support the entrepreneurial ecosystem, Jordan launched the ISSF in 2017, playing a vital role in stimulating early-stage financing, investing strategically in local and regional venture capital funds, and providing direct support to promising startups. 

The report cited a 2023 study by the Central Bank of Jordan, which found that only 28 per cent of startups and SMEs had obtained loans from financial institutions, while 50 per cent had bank accounts, highlighting clear gaps in financial inclusion.  

Based on the successes of the ISSF’s first phase, funded by the Central Bank of Jordan and the World Bank, preparations are underway for a second phase with a proposed new funding of $50 million. 

The next phase aims to expand early-stage financing for Jordanian entrepreneurs, increase investments in startups, and leverage strategic partnerships with venture capital funds.  

As of the end of October 2024, the World Bank had disbursed $46.8 million for the project supporting innovative enterprises, accounting for 93.6 per cent of the total $50 million funding. The initiative has created more than 1,760 jobs in Jordan.  

The World Bank approved the project on 23 June 2017, and the program supporting innovative startups and SMEs was launched on 23 September 2018. It is scheduled for completion on 30 June 2025. 

The total project funding stands at $98 million which is jointly financed by the International Bank for Reconstruction and Development with $50 million and the Central Bank of Jordan with $48 million.  

The project has allocated over 82 per cent of the total investable capital within the ISSF, attracting more than $200 million in private capital through multiple fundraising rounds. It has also engaged 19 institutional investors and financed 138 companies, including 31 led by women and 60 led by young entrepreneurs.  

These resulted to the creation of over 1,760 jobs in Jordan.