Financial Inclusion for MSEs:

Outlook for MFIs in Jordan

28 March 2016
 Jordan Microfinance Network Tanmeyah

• Formally registered as a non-profit institution at the Ministry of

Industry and Trade in 2007
• 8 Microfinance Partners in 12 Governorates
• Lobbying & Advocacy, Reporting & Market Research,
Benchmarking, Sector Capacity Building
 New Regulatory Landscape for MFIs

• Regulated by the Central Bank of Jordan

• Allows for the participation of non-profit and for-profit
companies
• Minimum capital requirement – 2 million JOD
• Limitations on mobilizing savings deposits
• Limited thresholds for access to medium enterprises
The Microfinance Sector is Experiencing Incredible Growth

• 46% growth in active borrowers since 2012

• 76% growth in gross loan portfolio since 2012
• 80% women clients
Total Gross Loan Portfolio(#) Active Borrowers (#)
200,000,000 400,000

350,000
150,000,000 300,000

250,000
100,000,000
200,000

150,000
50,000,000
100,000

50,000
0
Q4 2012 Q4 2013 Q4 2014 Q4 2015 0
Total Gross Loan 2012 2013 2014 2015
101,849,121 122,944,799 149,227,710 179,906,157
Portfolio(#) Active Borrowers (#) 243,793 282,631 325,744 357,777
Microfinance is a Significant Contributor To
Employment Growth In Jordan
Total Number of Microfinance Clients

357,777

Assuming 30% of the clients start/grow businesses

107,333 employed clients

Assuming 10% of clients start/grow businesses and have 2 employees

71,555 employment opportunity made by the MF sector

Source: GIZ Methodology
 MFI Product Mix 2014

As a Percentage of Gross Loan Portfolio

52%

18%
14%
4% 1% 3% 6% 0.11% 1% 1%

Commercial Industrial Services Agriculture Educational Home Enviromental Health Vocational Consumer
Maintenance Insurance
 Microfinance has enormous opportunity

2011 Microfinance Sector Coverage of Economic Active Jordanians

40%

31%
28%
23% 22% 24%
20%
18%
16% 16%
11%
6%

Source: National Employment Strategy 2011-2020

 Challenges With Expanding Financial Inclusion

• Inability to offer savings products

where clients have need
• Limited banking infrastructure
• Internal capacity to utilize digital
financial services, including mobile
financial services
• Need for customer education on
digital financial services
• Need for more studies about the
market
Challenges MFIs Face Serving Enterprises in MENA

Source: CGAP Nov 2012

 DFS OPPORTUNITIES FOR MFIs

Digital Field
Operations

Mobile banking
Data Analytics
(Database System)
Kiosk Machines
Credit Bureau

Mobile branch Partnerships with PSPs