The European Investment Bank (EIB) is partnering with Housing Bank to support the Jordanian economy with a €100 million line of credit to local private sector businesses that have been severely impacted by the economic consequences of the coronavirus outbreak.
The operation represents a coordinated effort with the European Union and forms part of Team Europe’s overall response to the Covid-19 crisis, which aims to support sustainable social and economic recovery of the region.
It also falls under the EU-EIB Economic Resilience Initiative (ERI), which amongst its primary objectives, intends to promote private sector development through the support to small and medium-sized enterprises (SMEs) as key players for generating economic growth and employment opportunities in Jordan.
Dario Scannapieco, Vice President of the EIB, 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 most needed funding through our cooperation with the Jordanian banking sector.”
Dario added: “Our partnership with Housing Bank for Trade and Finance aims to make available vital financing local businesses to help them cope with the economic impact of the Covid-19 pandemic. As part of the Team Europe response, we are committed to stepping up our support for Jordan to address the immediate challenges caused by the pandemic, as well as laying the foundations for a successful economic recovery after the crisis.”
Safadi went on to say the Housing Bank was among the first Jordanian banks to launch a financing program to support SMEs.
By helping them counteract the negative repercussions of the Covid-19 pandemic by offering them low interest rates of just 2%, a move that is in line with the Central Bank of Jordan’s directions in April 2020 in response to the Jordan Loan Guarantee Corporation’s initiative.
Safadi explained that the financing program offers excellent terms and competitive costs as a means of facilitating SME financing, helping them cover their operational costs and working capital in order to continue operations, pay employee salaries and meet their running costs.
Housing Bank’s CEO Ammar Safadi said, “This cooperation agreement is especially valued at Housing Bank, demonstrating the depth of the trust that EIB has placed in us as well as cementing their belief in our ability to support private-sector companies and especially the SMEs, a sector that we pay particular attention to due to its positive role in stimulating economic growth and providing job opportunities.”
He pointed out that Housing Bank has established a specialized department dedicated to supporting SMEs to obtain the necessary and needed funding through programs that offer preferential rates.
Al-Safadi added: “The European Investment Bank’s ardent financial support for the SME sector, which is the backbone of Jordan’s economy and a key driver of the economy, will go a long way towards recovery from the difficulties brought about by the coronavirus pandemic. Through these funds, we will be able to continue supporting the sector and safeguarding jobs while simultaneously strengthening the economy’s resilience.”
The EU Ambassador to Jordan, H.E. Maria Hadjitheodosiou, welcomed the financing provided by the EIB to Housing Bank, underlining the importance of supporting SMEs in maintaining jobs and creating economic growth.
The EU Ambassador added that this financing is complementary to other EU ongoing programs that aim to support economic growth, such as the €64 million programme “EU Support to Economic Reforms for Growth and Jobs in Jordan” that supports the implementation of the Government’s economic reform plans to improve private sector competitiveness and the investment climate, whilst strengthening public finance management.