AMMAN: Finance experts on Tuesday urged the Jordanian banking sector to further support small- and medium-size enterprises (SMEs), which largely contribute to the gross domestic product. At a discussion session held on the sidelines of the Jordan Afaq Economic Forum, which was inaugurated in Amman recently, the experts criticised the banking sector for not doing enough to assist SMEs, and for mainly “hoarding” cash in its vaults, the Jordan News Agency, Petra, reported.
According to a 2014 financial stability report issued by the Central Bank of Jordan (CBJ), the public sector received 7.9 per cent of credit facilities extended by banks in Jordan. SMEs received 8.5 per cent, while households’ (which include the majority of personal loans) share was 20.5 per cent, followed by the real-estate sector, whose share was 21.3 per cent. Large companies received the lion’s share (41.7 per cent), according to Adli Kandah, director general of the Association of Banks in Jordan.
At the discussion session, participants said banks support only 15 per cent of the SMEs in the country, whereas the remaining 85 per cent rely on their own resources. Speakers also highlighted the importance of raising awareness among the public on the role of banks and their services.
Meanwhile, Akram Karmoul, president of the association for Investment Protection, said the investment climate in Jordan suffers from many problems, mainly bureaucratic measures, in addition to high production costs. “Bureaucracy is disgusting,” he told The Jordan Times, accusing public sector employees of being “snobbish” and difficult to talk to. Investments are costly due to production costs, coupled with high living expenses, taxes and fines, thus rendering Jordanian products non-competitive in many cases, Karmoul said.
That is why a good number of investors choose to join the service sector, where there are fewer hardships and less costs, he noted, adding that more and more people choose not to invest their money and prefer to save it. Also, there is a great need for feasibility studies to be done ahead of venturing into any business, Karmoul said.
