World Bank Group Helps Smaller Businesses in Jordan
The Middle East and North Africa can be challenging environments for entrepreneurs. Getting credit is usually an uphill battle, bankruptcy laws can be harsh, and outside training is prohibitively expensive.
In an effort to change that, IFC and the International Bank for Reconstruction and Development (IBRD) are joining forces.
Last month, IFC and IBRD signed an advisory agreement to help The Jordan Loan Guarantee Corporation (JLGC) ramp up lending. The organization helps its customers - mostly micro, small, and medium enterprises - secure bank loans.
The deal is expected to help scores of smaller businesses, which form the backbone of Jordan's economy.
It also represents what can be accomplished when the World Bank Group works together, say staff members.
"There are so many areas in which we can combine our efforts, maximizing our impact on the ground," said Xavier Rielle, Manager IFC’s the Access to Finance Business Line in the Middle East and North Africa (MENA).
The Jordan project is part of the Micro, Small, and Medium Enterprise Facility, a joint investment and advisory initiative designed to help drive growth in MENA post-Arab Spring.
IFC and World Bank are managing the facility, and the advisory component has $32 million in funding. It's designed to encourage policy reforms, help banks ramp up lending to SMEs, and provide training directly to entrepreneurs.
“Activities under the facility have been focusing on assisting JLGC in strengthening its core internal capabilities, expanding its outreach, and increasing the impact of its SME-related products, especially those targeting marginalized areas and women,” said Sahar Nasr, program manager of the MENA MSME Facility with the World Bank.
Rielle says working with the IBRD in Jordan was simple and quick. IBRD will contribute $200,000 towards the project cost, take a seat on the project steering committee, and provide oversight. IFC will manage the project through to implementation.
The Access to Finance Business line is looking for other partnerships, and Rielle encouraged other project leaders to explore co-operation with the wider World Bank Group.
"In some quarters, there may be hesitation because people are used to working in a certain way,” he said. But the process of co-operation is not very difficult, and the development results can be dramatic."