NEWS WIRE: Jordan: French Development Agency (AFD) to Provide €7m in Concessional Financing to Microfinance Institutions Via Société Générale Bank of Jordan

Source: The Jordan Times.

Original article available online.

AMMAN, September 28 – The French Development Agency (AFD) will provide seven million euros in concessional financing to several microfinance institutions through the Société Générale Bank of Jordan (SGBJ) under a financing agreement signed on Sunday.

AFD Director General Herve Breton and SGBJ Director General Ali Khouli signed the agreement in the presence of Minister of Planning and International Cooperation Suhair Al-Ali and French Ambassador to Jordan Corinne Breuze, according to a Planning Ministry statement.

“The bank will receive concessional financial support, in terms of the interest rate and repayment period, in euros and will onlend it to institutions working in the microfinance sector in the local currency, provided that the benefiting institutions expand and upgrade their services to cover poor areas in the Kingdom,” Al-Ali said on the sidelines of the signing ceremony, adding that the ministry has been working with the AFD towards reaching a proper mechanism to fund microfinance institutions.

“Microfinance in Jordan is indeed an indispensable tool in the efforts towards eradicating poverty and creating productive job opportunities,” the minister said, noting that the government is looking to further develop microfinance institutions operating within this sector.

She added that the AFD’s support is consistent with the National Microfinance Strategy and is one of the initiatives adopted by the government to support the sector and upgrade services provided by relevant institutions in the interests of the targeted segments of the population.

“There has been an increase in demand for microfinance loans; therefore the government will continue its support to this vital sector in order to sustain its services in offering citizens soft loans at affordable terms, which, in turn, will assist in developing and enhancing the living conditions of the beneficiaries and the targeted groups,” Al-Ali said.

Under the agreement, 3.5 million euros will be provided to three local microfinance institutions: The MicroFund for Women will receive 1.8 million euros, the Jordan Micro Credit Company (Tamweelcom) one million euros and FINCA Jordan 700,000 euros, while negotiations are under way between the bank and other potential microfinance institutions that may benefit from the rest of the financial support stipulated in the agreement.

Al-Ali also highlighted that the ministry’s efforts and cooperation with various donors are aimed at attracting technical and long-term financing to upgrade the microfinance sector to an advanced level.

She referred to a February 2008 agreement under which the Spanish Agency for International Development Cooperation provided nine million euros to two microfinance institutions and $10 million provided in May 2009 by the Islamic Development Bank, in addition to a JD5 million grant the Planning Ministry provided to the Development and Employment Fund, to act as a wholesale lending entity to microfinance institutions in the country and specifically to expand their reach and product range.

Commending the AFD’s support for government efforts to boost the development process in the Kingdom, the minister underlined the strong ties between Jordan and France.

For her part, Breuze expressed her government’s keenness to continue its support for the country’s reform and development efforts in various sectors.