European Investment Bank, Housing Bank join forces to support SMEs in Jordan

AMMAN — The European Investment Bank (EIB) is partnering with Housing Bank to support the Jordanian economy with a 100-million-euro line of credit to local private sector businesses that have been severely impacted by the economic consequences of the coronavirus outbreak.

The operation represents a coordinated effort with the European Union and forms part of Team Europe’s overall response to the COVID-19 crisis, which aims to support sustainable social and economic recovery of the region, according to a statement made available to The Jordan Times.

It also falls under the EU-EIB Economic Resilience Initiative (ERI), which amongst its primary objectives, intends to promote private sector development through the support to small- and medium-sized enterprises (SMEs) as key players for generating economic growth and employment opportunities in Jordan.

EIB Vice President Dario Scannapieco said: “It is one of the EIB’s top priorities to support the resilience of the private sector during this unprecedented crisis with the provision of most needed funding through our cooperation with the Jordanian banking sector. Our partnership with Housing Bank for Trade and Finance aims to make available vital financing local businesses to help them cope with the economic impact of the Covid-19 pandemic.

“As part of the Team Europe response, we are committed to stepping up our support for Jordan to address the immediate challenges caused by the pandemic, as well as laying the foundations for a successful economic recovery after the crisis.”

Housing Bank’s CEO Ammar Safadi said: “This cooperation agreement is especially valued at Housing Bank, demonstrating the depth of the trust that EIB has placed in us as well as cementing their belief in our ability to support private-sector companies and especially the SMEs, a sector that we pay particular attention to due to its positive role in stimulating economic growth and providing job opportunities.”

He pointed out that Housing Bank has established a specialised department dedicated to supporting SMEs to obtain the necessary and needed funding through programmes that offer preferential rates.

Safadi went on to say that the Housing Bank was among the first Jordanian banks to launch a financing programme to support SMEs, helping them counteract the negative repercussions of the COVID-19 pandemic by offering them low interest rates of just 2 per cent, a move that is in line with the Central Bank of Jordan’s directions in April 2020 in response to the Jordan Loan Guarantee Corporation’s initiative.

Safadi said that the financing programme offers excellent terms and competitive costs as a means of facilitating SME financing, helping them cover their operational costs and working capital in order to continue operations, pay employee salaries and meet their running costs.

EU Ambassador to Jordan Maria Hadjitheodosiou welcomed the financing provided by the EIB to Housing Bank, underlining the importance of supporting SMEs in maintaining jobs and creating economic growth, according to the statement.

The EU ambassador added that this financing is complementary to other ongoing EU programmes that aim to support economic growth, such as the 64 million-euro programme “EU Support to Economic Reforms for Growth and Jobs in Jordan” that supports the implementation of the government’s economic reform plans to improve private sector competitiveness and the investment climate, whilst strengthening public finance management.