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.