(MENAFN- Advvise) Established in 1995 as a corporate bank with a focus on export and trade finance, Capital Bank of Jordan (CBoJ) has operated a strategic reorientation towards SME financing and a good client proximity through digital channels and well-designed digital products and services. With its strong commitment towards the SME sector and an elaborated set of products and services, the bank aims to become the leading SME bank in the country.
CBoJ has been an existing client of AFD since 2010, a partnership that was further extended with the signing of a trade finance guarantee between National Bank of Iraq, a subsidiary of Capital Bank of Jordan, and Proparco last July.
The loan by Proparco (up to USD 50m) and DEG (up to USD 25m) will help the bank finance and develop its SMEs portfolio with a special focus on women-led business, start-ups and FinTechs, youth-owned businesses and SME located outside the capital, Amman. An impact premium financed through a grant (the MENA Facility) will be set up simultaneously if the set of performance criteria is achieved. The objective is to support the bank to finance those segments that have difficulty accessing classic financial services but are considered very impactful for the economic development. The MENA Facility launched by the AFD Group, thanks to support from the European Union, has been operational since mid-2021 and aims to support the financial inclusion and financing of SMEs in seven Mediterranean countries: Algeria, Egypt, Jordan, Lebanon, Morocco, Palestine and Tunisia.
“We are very glad to deepen Proparco’s partnership with Capital Bank of Jordan through this USD 50m financing, which aims to provide financial solutions to Jordanian SMEs with a special focus on women-led business, start-ups and fintech. The contribution from the European Commission to this transaction will help go further in the support of Jordanian SMEs at a time when private sector has a critical role to play in the economic recovery of countries impacted by the Covid 19 pandemic,” said Djalal Khimdjee, Deputy Chief Executive Officer at Proparco.
“We are proud to join forces with Proparco in supporting Capital Bank of Jordan - a solid partner with a clear focus on consistent growth that is exceptionally well positioned to strengthen SMEs in Jordan. Together, we are confident that we can create a strong positive development impact,” said Monika Beck, Member of DEG’s Management Board.
Chairman of Capital Bank Group Bassem Al-Salem, commented on the signing of this loan agreement: “Capital Bank’s partnership with Proparco and DEG will take our recognized leadership in the SME sector one step further, allowing us to continue promoting sustainable economic development in Jordan through our support of this job-creating sector. This funding will propel investments, particularly in women-owned businesses and FinTech, two of the country’s most prominent emerging sectors, and will be a key contributor in the support of the expansion of Capital Bank’s SME portfolio through access to stable, long-term financing.” He added that Capital Bank has been implementing a business strategy geared towards empowering SMEs, coupled with availing all financial tools and technological advancements that are essential to the growth of their businesses.
“Our strategic partnership with Proparco and DEG is entirely in line with our mission to help equip SMEs with the necessary tools and dedicated products that enable them to grow their businesses. Capital Bank’s dedication to SMEs is further demonstrated through our plans to establish Neo Bank, our digital bank, which is set to meet the needs of the sector, working in tandem with the Switch-On for Business app for seamless and effective financial transactions. This will help our SMEs, with a particular focus on women-led companies, FinTech enterprises and startups, spur innovation, create economic value and further sustainable development in Jordan,” added CEO of Capital Bank Dawod Al Ghoul.
The project is expected to improve access to financing for more than 400 SMEs, with a special focus to finance women owned/led business; as such, the project qualifies to the 2X Challenge, a multilateral initiative that aims to support projects that empower women as entrepreneurs, business leaders, employees and consumers of products and services and increase their participation in the economy. In addition, the project will maintain close to 9700 jobs in the SMEs financed through the loan.
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