- Team Europe response to tackle the economic impact of the COVID-19 pandemic
- EIB funds to support SMEs and mid-caps in Jordan
The European Investment Bank (EIB) is further supporting the Jordanian economy with a €100 million ($119 million) credit line to Jordan Kuwait Bank (JKB) to be on-lent primarily to local small and medium-sized enterprises (SMEs) that have been severely impacted by the economic consequences of the COVID-19 outbreak.
The operation is a part of Team Europe’s overall response to the COVID-19 crisis, which aims to support the region’s sustainable social and economic recovery. It also falls under the EU-EIB Economic Resilience Initiative (ERI), which, amongst its primary objectives, intends to promote private sector development through support to SMEs as key players for generating economic growth and employment opportunities in Jordan.
Flavia Palanza, Director of the EIB’s Neighbouring Countries Department, said: “It is one of the EIB’s top priorities to support the resilience of the private sector during this unprecedented crisis with the provision of funding through our cooperation with the Jordanian banking sector and the support of the European Union. In this context, we are proud to partner with Jordan Kuwait Bank. A partnership through which we aim to make available vital and much-needed financing for businesses and, ultimately, sustain jobs and strengthen the resilience of the economy in the midst of the current crisis.”
H.E. Maria Hadjitheodosiou, EU Ambassador to Jordan, welcomed the financing agreement, which will aid SMEs struggling to address the economic impact of the pandemic, assist them in continuing their operations and in maintaining employment and creating new jobs. Mrs Hadjitheodosiou also indicated that this financing comes in addition to other ongoing EU programmes that support economic growth, such as the €64 million "EU Support to Economic Reforms for Growth and Jobs in Jordan" programme, which supports the implementation of the government’s economic reform plans to improve private sector competitiveness and the investment climate, while at the same time strengthening public finance management.
Haethum Buttikhi, JKB’s Chief Executive Officer, said: “Jordan Kuwait Bank’s commitment to the local economy continues to be a top priority. JKB has been a strong supporter and partner for SMEs over the years and in particular during this unprecedented time. Since the onset of the pandemic JKB has made it a top strategic priority to support SMEs, recording a 35% growth in facilities granted to this segment during 2020, granted at very low interest rates and guaranteed up to 85% by Jordan Loan Guarantee Corporation, which greatly supported the operational activity of these companies, in addition to the deferment of instalments for more than 300 companies during this period. JKB is proud to join forces with EIB to finance this vital and critical segment, that in turn will provide job protection, revitalise business activities and ultimately stimulate the local economy. We greatly value all the support and trust that the EIB has placed in JKB to provide finance for local businesses to face the challenges caused by the pandemic and for their support for Jordan’s economic recovery.”
SMEs are the backbone of the Jordanian economy as they account for over 95% of local businesses, contribute to more than 50% of gross domestic product (GDP), and employ about 60% of the working population. As a consequence of the COVID-19 outbreak, many companies have experienced a decrease in turnover and profitability, leading to payment delays and an increased demand for liquidity. It is now crucial to step up support for private sector businesses, thus helping to protect jobs and keep the economy going.
Jordan Kuwait Bank (JKB), a Jordanian public shareholding company, was founded in 1976 and has successfully evolved into a major player in the Jordanian banking system. The Bank currently operates a domestic network of 64 branches distributed throughout Jordan in addition to a branch in Cyprus. JKB wholly owns Ejara Leasing Company and Sanad Capital and holds a controlling share of more than 95.6% in United Financial Investments Co. (Jordan). JKB also has investments with board representation in Algeria Gulf Bank (Algeria), Quds Bank (Palestine) and Middle East Payment Services (Jordan).
Jordan and the EIB
EIB in the region
Economic Resilience Initiative