Short-Term Expert on Crowdfunding for MSMEs for Consulting Services for the Innovative Approaches for the Financial Inclusion of MSMEs in Jordan

Background:

Ninety eight percent (98%) of companies in Jordan are micro, small, and medium-sized enterprises (MSMEs), defined as companies with fewer than 100 employees. They employ around 70% of the workforce in the private sector, but their access to finance is inadequate: only 10% of all bank loans were granted to MSMEs, which is a low figure even by regional standards. Larger banks have little experience with financing micro and small enterprises and tend to approach them in the same way as large companies. At the same time, trust in and expectations of the financial sector tend to be low, as MSMEs often do not feel addressed by financial institutions. Supporting instruments such as loan guarantees from specialized institutions are available, but financial intermediaries are sometimes reluctant to use them, partly because of lengthy processes.

The Jordanian government and the Central Bank of Jordan (CBJ) have introduced a variety of reforms in recent years that favor MSME financing. Though these reforms are enacted, they often fail yet to reach full scale.

Objectives:

As the supply of innovative financial services to MSMEs in Jordan is inadequate, the overall objective of the project is to improve the access to innovative financial services for growth-oriented micro, small and medium-sized enterprises (MSMEs) in Jordan.

To improve the insufficient access to finance for MSMEs, the project has designed the following four outputs:

• Output 1 aims to strengthen the Central Bank of Jordan's capacity to create an enabling environment for innovative MSME financing.
• Output 2 aims to strengthen financial intermediaries about the provision of innovative financial services for MSMEs.
• Output 3 aims to develop and adapt qualification offerings on innovative financial services for growth oriented MSMEs to increase their knowledge and foster the usage of such products.
• Output 4 aims to improve the access to financial services for women-led businesses.

Our project team will work on outputs 2 and 4.

Tasks of the STE:

• Support leasing or crowdfunding companies to enhance their service offerings for MSMEs.
• Support the Central Bank of Jordan in enhancing digital finance regulations (e.g., regulatory sandbox) and in banking supervision topics, particularly regarding alternative financing companies’ regulation 107 covering crowdfunding and leasing.
• Support PFIs in the conceptualization and implementation of relevant strategies.
• Provide capacity development of staff members in the respective topics.
• Occasionally, provide trainings or other input for selected other stakeholders in the Jordan financial sector on innovative MSME finance