JLGC signs an agreement for a SMEs loan guarantee fund

JLGC signs an agreement for a SMEs loan guarantee fund

Director General of the Jordan Loan Guarantee Corporation (JLGC) Dr. Mohammad Al Jafari signed an agreement on Wednesday 22nd August 2012, at the Ministry of Planning and International Cooperation, to provide entrepreneurs and owners of small and medium sized enterprises (SMEs) with guarantees when they apply for financing from the Development and Employment Fund (DEF).

According to the agreement, co-signed by H.E. Minister of Planning and International Cooperation Dr. Jafar Hassan, and Development and Employment Fund (DEF) Director General Eng. Omar Al Omari, the ministry will allocate JD1 million for this purpose. The funds will be deposited at the JLGC. The ministry will later raise the amount to JD1.25 million.

Dr. Hassan said the fund seeks to increase productivity and enhance development in the country, particularly in poor areas.

The DEF will offer medium and long term financing to feasible enterprises, while the JLGC will guarantee up to 70 per cent of each loan, according to Hassan, who indicated that the majority of SMEs face difficulties in securing credit due to their inability to meet guarantee requirements.

According to official figures, small and medium sized projects receive less than 10 per cent of all credit facilities extended by financial institutions.

The contribution of SMEs to gross domestic product is around 40 per cent, and they account for nearly 70 per cent of created job opportunities.

Around 99 per cent of business establishments in the Kingdom are SMEs, according to the figures.