AMMAN: Access to finance poses the main constraint for Jordanian firms, according to a recently released survey prepared by the European Bank for Reconstruction and Development (EBRD).
The survey, which covered the period between May 2013 and April 2014, involved the four countries where the bank works in the southern and eastern Mediterranean (SEMED) region: Jordan, Egypt, Morocco and Tunisia. Political instability was among the top five concerns in all four countries, and was the biggest concern for Egypt and Tunisia, the study showed.
Firms in Egypt and Morocco considered corruption to be the second biggest obstacle, with firms in Jordan and Tunisia putting it in fourth place. The report noted that corruption was one of the factors that had led to the Arab uprisings.
Firms in three out of four countries considered competitors’ practices in the informal sector to be among the top three obstacles. Only in Jordan were they in the ninth place. In regards to access to finance in Jordan, the EBRD report, which was e-mailed to The Jordan Times, indicated that only 16.7 per cent of the firms had a loan or a line of credit, well below the SEMED average of 32.1 per cent and the rest of the EBRD region average of 37.4 per cent.
Almost 70 per cent of Jordanian firms that needed a loan were either discouraged from applying for a loan or rejected when they did, which is above the SEMED average of 57.2 per cent and the average for the rest of the region (47.5 per cent). More than three quarters of young firms and over 70 per cent of SMEs were credit-constrained, compared with 68.1 per cent of old and 19.7 per cent of large firms, said the survey.
