Promotion of the Microfinance Sector in the MENA Region (MFMR)

An analytical, in-depth market diagnostic of the supply and the demand side of the financial sector in Jordan is to be conducted with the aim to establish a baseline for financial inclusion and to inform the policy process of designing and implementing the national financial inclusion strategy.

The market diagnostic shall inform policymakers, regulators and private sector players in Jordan about:

• The levels of demand for, access to, usage and quality of formal and informal financial services for households and micro, small and medium-sized enterprises (MSMEs).
• The landscape of access to and usage of financial services across the different types of financial services providers and the product categories of savings, credit, payments / transfer services and insurance.
• The gap between the identified demand for and the actual patterns of access to, usage and quality of formal financial services across the different types of financial services providers and product categories.
• The demand and supply side drivers for greater adoption and usage of formal financial services.
• The barriers to greater financial access and usage with respect to the financial policy, legal and regulatory framework, the financial infrastructure, the financial service providers and product features.

• Prospects and recommendations for progressive public and private sector interventions and investments aimed at expanding the access, increasing the usage and improving the quality of formal financial services for households and businesses.

The diagnostic of financial inclusion shall build on full-fledged demand side and supply side studies.

• On the demand side, a nationally representative, household-level survey of individuals shall be conducted, considering a total sample of a minimum of 1,800 individuals in order to analyse data across key socio-economic (income levels), demographic (gender, age) and geographic segments. The survey shall be based on a robust methodology that allow for cross-country comparison of findings. Apart from that, existing, relevant demand side findings about MSME finance in Jordan shall be studied and analysed.

   

• On the supply side, relevant data relating to the financial infrastructure and providers shall be compiled in order to map levels of financial access and usage as well as to analyse barriers thereto across different product categories for both households and MSMEs. The supply side study sets the context and fills information gaps for better understanding the demand side findings about levels, drivers and barriers of financial demand, access, usage and quality. Both shall lead to the assessment of barriers and prospects for improvements related to the legal/regulatory framework, financial infrastructure, financial service providers, delivery schemes and products.