AMMAN - The Jordanian economy is heavily dependent on the success of small and medium enterprises (SMEs), Industry and Trade Minister Amer Hadidi said Sunday as he opened the 1st Regional SME Finance Conference in Amman.
Organised by the Business Development Centre (BDC), in partnership with the International Finance Corporation (IFC), Financial Markets International and Jordan Enterprise Development Corporation (JEDCO), the conference aims to maximise the coverage, quality and impact of SME finance in the Middle East and North Africa (MENA) region by sharing strategies, technological tools and best practices with financial institutions as well as international donors and government agencies.
Hadidi highlighted the importance of the conference saying that around 98 per cent of enterprises in Jordan are small- and medium-sized.
"SMEs currently employ 33 per cent of the total workforce," he indicated, stressing that the government is committed to the development of the SME sector by enhancing its competitiveness in the local, regional and international markets.
The minister said the government aims to stimulate new start-up businesses and encourage existing ones to grow but pointed to "access to finance" as the most critical challenge facing SMEs despite their pivotal role in MENA's socio-economic development.
Moreover, he added, traditional financing networks are costly and, most often, fail to understand SME requirements in terms of long-term financing and coaching.
"Other traditional sources of finance such as friends and families cannot sustain the growth of SMEs," Hadidi stated.
Noting that the government seeks to create 600,000 new job opportunities over the next 10 years, he underlined the importance of stimulating SME growth and described it as vital to achieve this goal.
"A World Bank study of MENA countries concluded that 47 million new jobs have to be created by 2012 to keep pace with new work entrants," Hadidi elaborated. "An additional 6.5 million new jobs must be created to keep unemployment levels below 10 per cent."
He spoke about challenges in terms of harnessing new market opportunities saying Jordanian businesses must invest in new strategies to be able to differentiate their products and services.
"To be able to compete globally and locally, SMEs must adopt new technologies, invest in research and development, upgrade and train their employees and further invest in growth strategies," the minister indicated.
Until Tuesday, 167 participants from 14 countries and prestigious institutions will be covering various topics on strategy, enhancement services, risk evaluation and mitigation, access to capital, leasing, Islamic banking risk capital, private equity and Angel Investors in additional to case studies.
By Samir Ghawi
© Jordan Times 2008
