Kick-Starting co-funding agreement to boost financial inclusion in Jordan

AMMAN — The embassy of the Kingdom of The Netherlands, the Central Bank of Jordan (CBJ), and Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) announced the start of a co-funding agreement for the "Innovative Approaches for Financial Inclusion of Micro, Small, and Medium Enterprises (MSMEs) in Jordan" (I-FIN) project, according to a statement for The Jordan Times. 

The Netherlands will contribute EUR1.5 million to support financial inclusion initiatives in Jordan, with a particular focus on empowering women-led MSMEs and promoting digital financial innovations. 

The Federal Government of Germany through its Ministry for Economic Cooperation and Development (BMZ) is funding the project with EUR10 million from 2021 to 2025. The ceremony was held at the Netherlands’ Residence in Amman, featuring remarks from Harry Verweij, Ambassador of the Kingdom of the Netherlands to Jordan; Ziad Ghanma, Deputy Governor of the Central Bank of Jordan; and Bertram von Moltke, Ambassador of the Federal Republic of Germany. 

The speakers highlighted the importance of partnerships in driving inclusive economic growth, job creation, and innovation. Harry Verweij, Ambassador of the Kingdom of the Netherlands to Jordan, said: "The Netherlands is committed to fostering private sector development in Jordan and contributing to a more resilient economy. Through this co-funding agreement, we are advancing one of our core development objectives: enhancing access to finance for MSMEs and promoting financial inclusion, with a focus on women-owned/led businesses." 

Ziad Ghanma, Deputy Governor of the Central Bank of Jordan (CBJ) , commented: "The I-FIN project has already made significant strides in strengthening Jordan's financial ecosystem, and this partnership with the Netherlands will further scale up innovative financial solutions, fostering greater financial inclusion of small companies and driving job creation." 

This partnership with the Netherlands marks a crucial step in building a more inclusive and resilient financial sector in support of company growth and job creation for Jordan’s future." During the ceremony, a discussion was held to review the Central Bank of Jordan (CBJ)'s key achievements in financial inclusion and financial technology, according to the statement. 

The attendance emphasised the importance of strengthening the financial sector and deepening its impact on job creation and economic growth in Jordan. Participants also explored the need for collaborative solutions and joint efforts between the private sector, government institutions, and international organisations, to overcome these challenges. In Jordan, MSMEs make up over 99.4% of the private sector and employ 89.7% of the workforce, yet only 11% receive credit lines from financial institutions. A survey conducted by the Central Bank of Jordan (CBJ) and GIZ in January 2023 revealed that financial inclusion is low, with only 6.9% of MSMEs having an outstanding loan or line of credit, and only 52% holding a bank account or e-wallet. 

This highlights the urgent need for customised financial services. The I-FIN project runs until 2025 and is implemented by GIZ in cooperation with the Central Bank of Jordan (CBJ). The project aims to enhance access to innovative financial services for MSMEs, supporting their growth and improving the overall regulatory environment in Jordan. With the additional support from DGIS, I-FIN will expand its efforts to support CBJ’s transition to risk-based supervision, digital financial innovations, and tailored financial services for women-led MSMEs, thereby promoting sustainable financial inclusion and stimulating economic development in Jordan, the statement said.