Download Progress Towards Creating more Effective Resolution Regimes

Maher Hasan
Deputy Governor
Central Bank of Jordan
JLGC-SME Conference 2014
Amman, Jordan November 24,25 , 2014
Outline
1.
Importance of SMEs in the Jordanian Economy
2.
Challenges Facing SMEs
3.
CBJ’s Policy for enhancing Financial Inclusion
4.
CBJ’s Programs Supporting SMEs
5.
Expanding CBJ Regulatory Umbrella
2
Constitute 95% of all the
companies in Jordan
Create 70% of Job
Opportunities
Account for 40% of GDP
3
World Bank Loan
($70million)
Credit Bureau(expected to be
licensed by end of 2014)
Arab Fund Loan ($200
million)
CBJ Statistics for SMEs
CBJ Internal
Window
High cost of
lending and
inappropriate
maturity
Lack of
Information
EBRD Loans $ 150
million & Guarantee
Challenges with
Managing
SMEs risk
TA for Banks and
training for SMEs
Lack of
Collaterals
New loan guarantee
strategy
Sharia Compliant Products
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Supply
• Communication
• Lowering banks cost of funds through programs with
global and regional partners.
• Lowering lending cost through programs with
global and regional partners.
Demand
• Extending CBJ supervision to MFIs
• TA and training for SMEs
• Consumer protection
• Financial literacy
Infrastruct
ure
• Islamic Finance (level playing field)
• Credit Bureau (expected to be licensed by the
end of 2014)
• National payment strategy with focus on retail
payments
5
World Bank Loan

USD 70 million for 15 years with 5 years grace period ( CBJ
to banks)

Interest Rate: LIBOR+1.8%( CBJ to banks)

12 banks participated including 2 Islamic banks


More than 4000 clients benefited from the loan ( 58%
outside Amman )
Average interest rate on loans granted to SMEs is about 6%
6
Arab Fund Loan

USD 50 million for 10 years with 3 years grace period ( CBJ
to banks)

Interest Rate: 2.5% ( CBJ to banks)

12 banks participated including 1 Islamic bank

Will be disbursed to the banks very soon

USD 150 million non loans
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

CBJ has an internal program directed to the industrial
and tourism and renewable energy sectors. The
program aims to provide medium-term financing to
these sectors (including SMEs) at reasonable cost.
98 projects benefited from this program with a total
amount that reached to JD 88 million as at
23/10/2014.
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

Availability of Information: The first Credit
Information Company is expected to be licensed by
the end of 2014 which will help in enhancing access to
finance especially for SMEs .
Credit Guarantees: In cooperation with the IFC,
restructuring and procedural improvements of the
JLGC is undergone in order to provide the necessary
collaterals to obtain funds for SMEs.
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

The CBJ has finalized drafting the Microfinance Bylaw
and sent it to the Cabinet in June-2014
As a second phase the CBJ will study the feasibility and
the possibility of regulating all non-banking financial
institutions
10
Thank you
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