The United States Agency for International Development’s Jordan Loan Guarantee Facility (USAID JLGF) Program is implemented by Global Communities, formerly known as CHF International.

Since 2012, over $100 million in loans have been made to small and medium enterprises (SMEs) in Jordan as a result of the United States Agency for International Development’s Jordan Loan Guarantee Facility (USAID JLGF)
Small and medium enterprises (SMEs) continue to be the key to innovation and the engine of sustainable economic growth and job creation in Jordan. SMEs represent roughly 95 percent of all registered companies in Jordan, contribute 50 percent or more to GDP and provide employment to an estimated 60 percent of the Jordanian workforce. Despite the crucial role they play in Jordan’s economic growth, SMEs-- and particularly women-owned SMEs-- have great difficulty accessing the financing needed for start-up and growth. Bank financing for SMEs is limited by a financial infrastructure that lacks credit information, provides weak creditor rights, and is constrained by a deficient secured transactions (collateral) infrastructure. USAID, in partnership with the Overseas Private Investment Corporation (OPIC), established the USAID Jordan Loan Guarantee Facility (JLGF), an inclusive finance activity that is improving access to finance for SMEs in Jordan. USAID JLGF provides partial loan guarantees and technical assistance to mobilize bank financing for creditworthy but previously underserved SMEs. Consistent with USAID objectives, USAID JLGF is promoting long-term sustainable development through high-impact partnerships with the private sector and financial institutions in Jordan and is facilitating the introduction and application of best practices in SME financial management and SME credit. USAID JLGF is stimulating private-sector-to-private-sector investment – the most effective path to sustainable economic growth, job creation, and community development.
Reducing the risk of SME lending through partial loan guarantees

USAID JLGF provides partial loan guarantees from OPIC to support creditworthy SMEs that do not meet the normal bank criteria for loan approval.

USAID JLGF guarantees provide for the repayment of up to 75 percent of qualifying SME loans made by seven partner banks: Arab Bank, Cairo Amman Bank, Capital Bank of Jordan, Bank al Etihad, Housing Bank for Trade and Finance, Jordan Ahli Bank, and Jordan Kuwait Bank.  Eligible loan purposes include financing equipment, construction, inventory, and accounts receivable. Loans typically range in size from JD 20,000 to JD 1,000,000, with terms of up to five years.

Building the capacity of banks and SMEs to achieve sustainable increased access to finance

USAID JLGF is providing technical assistance to its partner banks to help them institutionalize international best practices in SME credit, including incorporating cash flow analysis in lending decisions and reducing the reliance on collateral as the sole criterion for credit approval.  USAID JLGF is assisting the Central Bank of Jordan’s Institute of Banking Studies (IBS) with its SME Credit Diploma Program, which provides further training for the Jordanian financial sector.  

USAID JLGF conducts workshops for established SMEs and aspiring entrepreneurs in skills training on topics such as how to prepare personal and business financial statements, understanding profit and cash flow, preparing projections, and conducting break-even analysis, with the goal of helping them improve operations and communicate more effectively to potential lenders.

USAID JLGF has coupled highly innovative and practical technical assistance and capacity building with the issuance of more than 400 loan guarantees, which resulted in more than $100 million in bank financing for SME start-up and expansion.

Developing the economy outside of Amman

More than 30 percent of USAID JLGF beneficiaries are outside of Amman -- in Aqaba, Balqa, Madaba, Jerash, Irbid, Karak, Ma’an, Ajlun, Mafraq and Zarqa. These businesses operate in a variety of sectors including food, professional services, manufacturing, tourism, retail, and wholesale trade.

Supporting women-owned and led businesses

Over 16 percent of loan guarantees have benefitted women-owned business. In addition, USAID JLGF has provided financial management training to build the capacity of more than 242 women through special workshops for women entrepreneurs.

Helping to start the clean technology revolution in Jordan

Beyond demonstrating the financial viability of the sector through the issuance of loan guarntees, USAID JLGF’s technical assistance and introduction led to a partner bank’s launch of a new green business finance initiative, conducted in partnership with another USAID project.

Institutionalizing sustainable access to finance for SMEs

USAID JLGF has trained over 532 bank staff members in best practices in SME credit analysis and has conducted workshops for more than 640 SME business owners and managers to build their capacity in financial management.