In an effort to support the Government of Jordan in reforming the microfinance sector, the German Cooperation and the European Union set up a joint technical assistance programme that promotes financial inclusion through improved governance and outreach of microfinance in Jordan.
The microfinance sector in Jordan has been growing strongly with a growth rate of 30% between 2007 and 2012 and nowadays serves roughly a fifth of the Jordanian population, with loans, some insurance products and supportive non-financial services. The absence of regulation, however, had so far prevented reaching more people in need, particularly outside the more urban areas, and has left many borrowers without an adequate sovereign protection framework. The Government of Jordan therefore enforces the implementation of its national microfinance strategy, a far-reaching effort the European Union and the German Cooperation now support jointly.
As part of its sector reform support to Jordan, the European Commission entrusts GIZ with the implementation of the new project “Promoting financial inclusion through improved governance and outreach of microfinance in Jordan”. Carried out by the GIZ MFMR programme in Jordan, the project will back the government in implementing the microfinance strategy and developing it further towards a national financial inclusion strategy.
The joint project covers a period of four years, with three components supporting the institutional capacity development of key institutions. In line with the objectives set out between the EU and the Government of Jordan, the technical assistance implemented by GIZ MFMR focuses on:
- Towards the CBJ: Microfinance regulation and supervision including consumer protection standards, financial inclusion policy formulation,
- Towards the MoPIC as chair of the Steering Committee in charge: Policy coordination, monitoring, research and data development,
- Towards the DEF: Reform into a wholesale infrastructure for the microfinance market.
The joint project is carried out by the GIZ MFMR programme with funding by the EU and Germany from 2015 to 2018 with a budget of 4,625 million EUR.
By Atilla Yuecel