Central Bank Announces Development Funds to Kick-Start Economy

Arab Bank CEO Nemeh Sabbagh

Arab Bank CEO Nemeh Sabbagh

The Central Bank of Jordan plans to set up a series of multi-million dinar development funds designed to stimulate the economy.

“The Central Bank has worked on a number of finance initiatives through funds to help out startups, small businesses,” said Minister of Finance Omar Malhas at the Euromoney Conference that was held in Amman in March.

To support Jordanian exports, particularly in a number of new markets, the Central Bank will extend a JD100-million loan to the Jordan Loan Guarantee Corporation to help the company promote national exports, Petra news agency said.

While a JD100-million entrepreneurship fund is a joint effort by the Central Bank, the Ministry of Planning and International Cooperation, and the World Bank that aims to support emerging ventures, Petra added.

On the two banking investment companies, Arab Bank CEO Nemeh Sabbagh said they aimed to increase lending to SMEs, particularly the newly established ones. “To support and accelerate growth of medium sized enterprises, the banking sector has developed an important initiative through the creation of a joint equity fund which was launched in March 2017.”

He added that under the guidance and support of the Central Bank of Jordan, five banks that include Arab Bank, Housing Bank, Jordan Islamic Bank, Jordan Kuwait Bank and Arab Jordan Investment Bank, are making capital commitment into this equity growth fund.

Most banks operating in Jordan, he added, are subscribing to this fund—including 15 commercial banks, which are jointly subscribing to a JD100 million, and three Islamic banks subscribing another JD25 million.

“The fund will make equity investment in businesses that have a potential for growth and expansion. As they grow these companies will increase the demand for banking services which will also strengthen the banks’ portfolio in this important segment of the lower end of medium-sized companies,” explained Sabbagh. The targeted companies will be able to competitively seek financial services from any bank and get the best terms and services.