Amman:, FMO and Capital Bank of Jordan announced the signing of a USD20 million NASIRA guarantee programme. This guarantee is earmarked for MSME loans to COVID-19-affected and young entrepreneurs, to be originated by companies lending to small businesses in Jordan, United Liwwa for SME Financing (Liwwa) and Sanadcom.
This is a landmark transaction in the MENA region, allowing alternative MSME lenders; Liwwa and Sanadcom to access sustainable funding through a local tier 1 bank. It mobilises larger volumes of local funds that would otherwise not get to these alternative lenders.
The NASIRA programme is a risk-sharing facility for local financial institutions supported by the European Union (European Fund for Sustainable Development (EFSD) and MASSIF, the financial inclusion fund FMO manages on behalf of the Dutch government. It is a new way of unlocking support to underserved segments, specifically young, female, migrant, and COVID-19-affected entrepreneurs, groups that often remain underbanked due to high risks - both perceived and real involving absence of collateral and credit history, among others. The NASIRA guarantee programme takes away this hurdle by agreeing in advance to share possible credit losses.
Capital Bank of Jordan is part of Capital Bank Group, one of the largest banking institutions operating in the Jordanian and regional markets servicing corporate, SME and retail clients. With an increasing focus on the SME segment since its inception in 1995, the bank has a binary strategy whereby it serves the well-established medium to larger SMEs directly, and the smaller enterprises by means of partnerships with local Fintechs and other alternative SME lenders as a way of reaching out to all layers of the MSME ecosystem.
To support and strengthen Capital Bank of Jordan’s efforts to reach the underserved MSMEs, FMO will provide a NASIRA loan portfolio guarantee covering loans provided to young and COVID-19-affected entrepreneurs. The underlying loans will be used for income-generating activities.
Speaking about the guarantee programme, Financial Institutions Director at Capital Bank Jamal AlQudah said, “As a leader in the field of SME financing, Capital Bank has a deep understanding of the important role played by the sector in the national economy, we express our gratitude to FMO and the European Commission for their support. This funding, which will bolster the sector in the wake of the exceptional circumstances brought about by the coronavirus pandemic, will allow companies to maintain their liquidity and remain financially agile. This will, in turn, lead to sustainable development through private-sector growth and employment opportunities.”
EU Ambassador to Jordan Maria Hadjitheodosiou said: “The European Union is very pleased with this transaction between FMO and Capital Bank of Jordan, with the support of the guarantee provided by the European Fund for Sustainable Development. Our excellent cooperation with FMO under their flagship initiative NASIRA, helps promoting and supporting financial inclusion, not only in Jordan but also in other countries in the region“
“With the guarantee programme to Capital Bank of Jordan we aim to unlock funds to support MSMEs. At the same time, by covering Liwwa and Sanadcom's portfolio with the NASIRA programme, we intend to contribute to the growth of a sustainable local financial ecosystem and mobilise local savings,’’ says Huib-Jan de Ruijter, Chief Investment Officer a.i. of FMO.
About Capital Bank Group
Capital Bank Group is one of the largest banking institutions operating in the Jordanian and regional markets, with assets of 4 billion Jordanian Dinars, while the total rights of its shareholders amount to nearly 400 million Jordanian Dinars.
Capital Bank Group includes Capital Bank, which was established in 1995, and since then, its business has grown to become one of the leading Jordanian banks specialized in providing integrated packages of investment and commercial banking solutions and services designed to meet the requirements of corporate and individual customers alike.
In 2005, Capital Bank (Jordan) purchased the majority of the shares of the National Bank of Iraq (61.85%), which enabled the Bank to develop its products and services, enhance its foothold and financial inclusion at the Iraq level, support export activities, and provide all services to Jordanian companies operating in Iraq. The National Bank of Iraq recently obtained the necessary approvals to establish a branch in Saudi Arabia.
Meanwhile, Capital Investments, a wholly owned subsidiary of Capital Bank, established in 2006, provides specialized investment banking services to its customers through its offices in Jordan and UAE/ Dubai International Financial Center (DIFC).
Towards the end of 2020, and in fulfillment of its expansion plans, Capital Bank Group acquired the operations of the Lebanese Bank Audi in Jordan and Iraq, where the branches of Capital Bank increased to 28, and the National Bank of Iraq to 18.
For more information, please visit Capital Bank website: www.capitalbank.jo
FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50-year proven track-record of empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 9.7 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. For more information: please visit www.fmo.nl
NASIRA is an innovative financial programme that supports young, female, and migrant entrepreneurs in Sub-Saharan Africa and countries neighboring Europe. As of April 2020, the scope is widened to also reach small COVID-19 affected entrepreneurs in the same regions. NASIRA uses guarantees to allow local banks to on-lend to underserved entrepreneurs. The goal is to allow local banks to provide loans to groups they normally perceive as too risky. By so-called ‘risk-sharing’ NASIRA reduces the perceived and real risks of lending to vulnerable and underserved parts of the population. The NASIRA guarantee is part of the EU External Investment Plan, which, by investing €5.1 billion in EU funds, is set to leverage more than €50 billion in total investment from the public and private sector. It will enable small business owners to access affordable loans through local banks, microfinance institutions and other non-banking financial institutions. For more information, please visit: http://www.nasira.info/
© Press Release 2021
Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.
The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.
To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.