IFC, a member of the World Bank Group, is providing a $10 million loan in local currency to a leading microfinance institution in Jordan, part of an effort to support smaller businesses and entrepreneurs, including women.
IFC’s financing will help Tamweelcom, the country’s second-largest microfinance company, increase its outreach to small business owners, including women. Jordan’s economy is hindered by a host of challenges, from rising unemployment to an influx of refugees, which have held back economic growth and pushed the poverty rate above 14 percent. Microfinance can play a pivotal role in reversing this cycle as it enables people to build assets, increase their incomes, and reduce their vulnerability to economic stress.
“Our long-term strategic partnership with IFC continues to be aimed at sustainably expanding our reach across Jordan and the Micro and Small business sector where access to financial services is very limited. Tamweelcom is committed to supporting Jordan’s National Financial Inclusion strategy and re-shaping the future of this industry through a growing suite of responsible financial solutions pinned on a digital transformation” said Niveen Abboushi, Chairwoman of Tamweelcom.
Jordan’s micro, small and medium enterprises account for over 90 percent of businesses and comprise around 71 percent of private sector employment. However, their access to formal financial services remains limited, with the sector getting just 10 percent of total bank lending. A large number of unregistered home-based businesses and self-employed workers also have no access to bank finance.
“Boosting financial inclusion is essential for building shared prosperity and eradicating poverty,” said Kudret Akgun, IFC’s Regional Industry Manager of Financial Institutions Group in the Middle East and North Africa. “Micro and small businesses are also the engine of growth in many economies and it’s vital to ensure they have the access to credit they need to grow and prosper.”
Tamweelcom is a strategic client to IFC. The financing marks IFC’s third investment in Tamweelcom. IFC has also provided several advisory packages to Tamweelcom over the years to build its capacity in areas including sustainable energy/energy efficient products, risk management and business loan product development.
Nearly two billion people in developing countries have little or no access to formal financial services. IFC is one of the leading global investors in microfinance in terms of volume. In the fiscal year 2018, IFC committed $413.2 million to 27 projects with microfinance institutions. Its cumulative investment portfolio in microfinance currently exceeds $3 billion.
Original source: IFC
Published on 5 November 2018
