Gov’t, CBJ allocate JD21m for microfinance lenders

The Central bank of Jordan building in Amman
(Photo: Jordan News)
AMMAN — The government and the Central Bank of Jordan (CBJ) on Monday launched a JD21 million soft financing scheme targeting microenterprises and home-based micro-projects, according to the Jordan News Agency, Petra.اضافة اعلان

The amount will be made available to microfinance companies which will, in turn, re-loan the funds to small and microbusinesses and self-employed individuals.

Under this program, which targets productive projects exclusively, microenterprises are granted loans/facilities to cover operating expenses, working capital, and capital expenditures, with a maximum financing ceiling of JD25,000, according to a CBJ statement.

On the other hand, loans or financings provided to professionals, craftsmen, and self-employed individuals are subject to a maximum financing ceiling of JD5,000.

Micro-financers participating in the program will lend to eligible beneficiaries at an actual cost (interest rates and any other commissions) not exceeding 9 percent (reducing), provided that the borrower bears an actual cost that does not exceed 5 percent (reducing) while the government bears the remainder of the cost.

The Jordan Loan Guarantee Corporation will also guarantee the facilities granted under the program with a guaranteed rate of 85 percent.

The program aims to provide soft financing for micro and small businesses and home-based micro-enterprises through micro-financers licensed by the CBJ, to help them sustain their businesses and cover their operating and capital expenses.

The CBJ said the scheme recognizes the microfinance sector’s and microenterprises’ role in propelling economic growth and combating unemployment and poverty.

Earlier this month, the first installment of the tranche, approximately JD9 million, has already been transferred to four companies: the Ahli Microfinance Company, the National Microfinance Bank, the Microfund for Women, and FINCA Microfinance Company.

Read more Business