About Bank al Etihad
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Established in 1978 as a public shareholding company
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One of the fastest growing banks in Jordan; grew at double or triple
the market rate over the last 3 years
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Growth Rate (BaE vs. Total Market)
Deposits
2012
2013
2014 (Aug)
Total Market
2.40%
10.51%
5.55%
BaE
9.16%
27.34%
12.34%
Facilities
2012
2013
2014 (Aug)
Total Market
12.40%
6.30%
1.34%
BaE
17.00%
19.60%
7.41%
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Traditionally a strong corporate bank
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Strategic direction to diversify into certain segments of Retail
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Launched major rebranding campaign in 2011 and completely
revamped branch environment and experience.
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Strategic direction to grow in SME, today SME deposits constitute
around 4.5% of total bank deposits, SME credit facilities make around
8% of total facilities. Plan to increase SME to constitute 20-25% of
portfolio in the next 3-5 years.
SME in the Economy: Facts and Numbers
• 100,000+ SMEs in Jordan
• 97% of all companies in Jordan are SMEs
• SME contribute 50% or more of GDP
• Employ 60% of the Jordanian workforce
• Account for 70% of new jobs and 45% of exports
Despite the importance of SMEs to the economy, there is still a large
financing gap:
• Total current financing for SMEs is estimated at USD 2 billion
• SME financing gap is estimated at another USD 2-3 billion
Ecosystem /Key Enablers
Access to Finance:
• Loan Guarantee Programs
• SME Finance Facilities and Programs
Access to Information:
• Credit Bureau
• SME Financial and Nonfinancial Advisory Services
Access to Markets
Legal and Regulatory Framework
• Movable Asset Registry , Securitization Laws…
While Jordan has made significant strides within each enabler, certain
challenges remain.
Recent Focus on SME in Jordan
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Government Programs and Initiatives
Central Bank of Jordan
OPIC
IFC
EBRD
World Bank
EIDB
Loan Guarantee Programs in Jordan
Loan guarantee programs are currently offered to banks through 2 main
organizations:
• Jordan Loan Guarantee Corporation (JLGC)
• Overseas Private Investment Corporation (OPIC)
Loan Guarantee Programs: Successes
• JLGC and OPIC programs were both successful in catalyzing SME
financing in Jordan
• Tangible benefit for SME clients through reduction of collateral
requirements; addressed one of largest obstacles facing SMEs
• Increased financial awareness and understanding among SMEs
through numerous training workshops
• Continuous outreach to bank staff to offer additional services and
support (e.g. staff training, marketing materials)
• Created successful linkages between banks and SME clients
through conferences and other events
• Joint client visits to provide comprehensive solutions to SMEs
(financing and guarantee)
• Better information about SME clients through JLGC and OPIC
database
Loan Guarantee Programs: Challenges
• Maximum guaranteed amount per client through all banks is low (JD
100,000) – JLGC
• Increase loan guarantee amount for critical sectors to match Industry
• Loan guarantee is non-transferable between banks, restricting
freedom of choice for clients
• Operating on case by case basis
• Sharing other collateral in event of default could stop further expansion
with client – JLGC
• Concern regarding confidence in payment in event of default
• High commission rate restricts goal of reducing cost of borrowing for
SMEs
SME Finance Facilities: Successes
• CBJ has provided continuous and sustained support to SMEs
through various financing programs
• MSME Finance Facility enabled banks to reach new sectors/segments
they could not previously reach
• Medium-Term Finance Facility was successful in facilitating financing for
the manufacturing, tourism, and renewable energy sectors at
preferential rates and flexible terms for SME clients
SME Finance Facilities: Challenges
• SME financing needs to be sustainable
• Concept of risk based pricing
• Currency of lending programs
• Amount of funding available to banks is small compared to market
demand
• Certain programs offer financing facilities in foreign currency
• Medium-Term Finance Facility (through CBJ) is limited to 3 sectors
(tourism, manufacturing, and renewable energy)
Bank al Etihad and the SME Sector
• Established dedicated SME banking department
• Entered into partnership with IFC to design and implement a new SME
strategy
• Created specialized SME business centers to service all client needs
• Team
• Offers financial and non-financial solutions and services; 360-degree
approach to SME banking
• One of the first banks to join the OPIC loan guarantee program
• BaE has the largest portfolio of OPIC-guaranteed loans
• Recently updated partnership with JLGC through new agreement
targeting SMEs
• Fully utilized allocated portion of MSME Finance Facility (World
Bank/CBJ)
• In discussions to enter new partnership with EBRD
Bank al Etihad SME Awards
• Bank al Etihad recently launched its first annual SME Awards to
recognize and reward SMEs and entrepreneurs
• 3 Award categories:
 Best SME (JD 25,000)
 Business Woman of the Year (JD 25,000)
 Best Startup (JD 10,000)
• 4 main evaluation criteria:
 Financial Strength/ Sustainability /Creativity /Social Impact
• Winners announced in awards ceremony on 18/11/2014
The Awards Ceremony
12 Finalists (4 in each category)
Why is BaE targeting Women?
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25% of businesses in Jordan are women-owned
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Only 5% of women-owned businesses are well-served by banks
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Financing gap of for women-owned business
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While unemployment rates are higher among women, more than
55% of all unemployed women are educated
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Enhancing women’s participation in the national economy directly
impacts Jordan’s economic growth
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45% of Bank al Etihad team are women
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Women representation in top management
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Band values and culture
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Equal rights and benefits
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Member of GBA
How does BaE support Women?
BaE recently announced the launch of its Shorouq Program:
• Comprehensive banking solutions and non-financial services
specifically designed for women across Jordan
• Targets women in various segments: employees/professionals,
business owners (SMEs), entrepreneurs, and in financial planning
• Seeks to support women in gaining access to funding, knowledge and
markets
• Online portal launched as an advisory/networking tool for women
• BaE is a member of the Global Banking Alliance for Women (GBA)
Please visit:
https://shorouq.bankaletihad.com/