AMMAN: Jordan is intensifying efforts to provide support for start-ups and small and medium-sized enterprises (SMEs) by easing access to financing. Rising public and private investment in Jordan’s digital economy contributes to an optimistic outlook despite some continued obstacles to conventional bank finance.
According to the 2011 census, roughly 98% of all companies in the kingdom are micro-enterprises or SMEs, employing some 71% of the private sector labour force – though this share dips to 31% once public sector workers are included in the total, as per OECD figures. Moreover, SMEs account for upward of 40% of Jordan’s total nominal GDP, making access to finance for SMEs key to the country’s economic development.
However, in a survey of the business environment of Jordan and surrounding countries, the European Bank for Reconstruction and Development (EBRD) reported that more than 70% of SMEs in Jordan are credit-constrained, compared to 19.7% of large businesses, while a 2012 EBRD survey found that 36% of small businesses in Jordan perceive access to funding as either a major or very severe obstacle to their operations. This is particularly true for start-ups with no credit history and limited collateral.
