CBJ programmes, financial inclusion initiatives respond to economic challenges of COVID-19

AMMAN — Amidst the coronavirus crisis, the Central Bank of Jordan (CBJ), in cooperation with the entire banking sector, has employed "effective tools" in monetary and fiscal policy to offer the necessary liquidity to businesses and individuals to alleviate economic burdens.

The CBJ has launched a number of financing and cash programmes to support the economy and enable businesses to cover their operating expenses during the global COVID-19 crisis, including a JD500 million programme designated for SMEs. The total amount of loans within this programme have reached JD360 million at an average of JD98,000 per business, according to a CBJ statement.

The programme, designed to support affected professionals, craftsmen, individual institutions and SMEs, financed 3,645 loans up through July 5.

During the COVID-19 crisis, the CBJ’s soft financing programme, created in 2012 at an amount of JD1.2 billion, has supported 134 businesses with a total of JD130 million.

The soft financing programme’s scope was expanded during the crisis to finance salaries, operating expenses and working capital. The programme’s interest was also reduced to provide longer repayment periods, raising the ceiling for advances and covering more sectors.

This programme provides services for various economic sectors, including the industry, tourism, agriculture, renewable energy, IT, transport, health, technical and vocational education, engineering consultancy and export sectors.

Another CBJ measure involved allowing banks to postpone due installments in March, April and May 2020, in addition to postponing June’s dues for affected businesses.

Moreover, the CBJ in September 2016 began the national strategy for financial inclusion, which allows all clients to access financial services and online payment through eFAWATEERcom.

Financial inclusion has several main axes: E-payment systems, microfinance, financing SMEs, financial culture, financial consumer protection and collecting and analysing data and performance indicators.

The CBJ has also opened the door for a number of e-payment companies to operate, namely Zain Cash, Dinark, Orange Money, Aya, National Wallet and Gadha.

During the crisis, employees’ salaries have been disbursed through e-wallets, the statement added, calling on private sector employees, who do not have bank accounts and receive cash salaries to open e-wallets.

The strategy has managed to boost the financial inclusion rate from 24.6 per cent to some 50 per cent, which is twice the percentage recorded in 2017, thanks to both a full implementation of the strategy and the CBJ’s policies, which aim to make financial services available for all segments of society.

In 2018, the number of banks operating in Jordan reached 24, including 16 Jordanian banks — three of them Islamic banks — and eight foreign banks, one of which is an Islamic bank.