Jordan MSME Framework

Location:

Jordan

Project number:

45668

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

17 Sep 2014

Status:

Board Approved

PSD disclosed:

14 Aug 2014

Sub-projects signed under this framework

Project Description

The EBRD is considering US$150 million (approx. JOD106 million) senior unsecured facility to Jordanian Partner Banks (PBs) for on-lending to eligible MSMEs in Jordan. The senior unsecured facilities will be made available in JOD, USD or EUR to PBs; however the on-lending to the local MSMEs will be in JOD. The JODs are sourced from the Central Bank of Jordan (CBJ) through a swap agreement. The framework will offer an optional loan guarantee scheme, including a first loss tranche, provided by the EBRD and a second loss guarantee provided by a local guarantee institution, Jordan Loan Guarantee Corporation (JLGC). In addition, the EBRD will be providing technical co-operation for capacity building to the Partner Banks.

Transition Impact

Sources of Transition Impact:

- Market Expansion: Jordanian MSMEs account for 95 per cent of active businesses in Jordan, providing 70 per cent of private sector total employment and generating around 40 per cent of GDP. Yet, access to finance remains an important impediment to MSMEs’ growth, with bank lending to MSMEs estimated at around 11 per cent of total lending.

- Skills Transfer: Dedicated technical assistance will support Jordanian banks in building capacity in MSME lending.

The Client

The Framework will be made available to all eligible banks in Jordan subject to EBRD’s due diligence. It is expected that there will be at least five Partner Banks (PBs) under the Framework. The first two PBs proposed for approval under the Framework will be Bank Al Etihad and Cairo Amman Bank.

EBRD Finance

Debt

Project Cost

US$150 million / JOD106 million

Environmental Impact

Categorised Financial Institutions. All PBs will be required to comply with the EBRD’s Performance Requirements (PR) for FIs (specifically, PR2 Labour and Working Conditions and nine Financial Intermediaries) and adhere to the EBRD’s Environmental and Social Exclusion and Referral Lists and submit Annual Environmental and Social Reports to the EBRD.

Technical Cooperation

None

Company Contact

Melis Ekmen Tabojer

EBRD, Financial Institutions

Tel: +44 20 7338 6769

Email: tabojerm@ebrd.com

 

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