The European Bank for Reconstruction and Development (EBRD), FCI, and the Association of Banks in Jordan held a conference on 29 April to promote the understanding and use of factoring and supply chain finance in Jordan, which are essential tools for unlocking trade.
The event attracted experts from the EBRD, FCI, legal practitioners and industry specialists, who gave participants a comprehensive overview of the evolving landscape of factoring and supply chain finance. They also discussed the importance of regulation, risk management and collaboration in developing these markets.
Speakers highlighted the benefits of factoring and supply chain finance for small and medium-sized enterprises (SMEs), such as flexibility, risk mitigation and enhanced liquidity. They also shared case studies and real-world experiences to show how these tools support trade, businesses and economic growth.
Gretchen Biery, Director and Regional Head of the Eastern Mediterranean Region at the EBRD, talked of the role the Bank can play. “The EBRD can make a significant contribution to regional economic development. By fostering a robust market for factoring and supply chain finance, the EBRD can equip Jordanian companies, particularly SMEs, with the working capital they need to thrive. This, in turn, will fuel domestic growth, boost regional trade and contribute to Jordan’s economic potential.”
Maher al Mahrouq, Director General of the Association of Banks in Jordan, explained how banks need to embrace new financial tools. “As we navigate an ever-evolving global economy, it becomes increasingly imperative for banks to explore innovative financial instruments that can facilitate trade, empower businesses and drive economic growth. Factoring and supply chain finance are indispensable in this endeavour.”
Maha al Abdallat, Head of Finance Companies and Credit Bureaus Supervisor at the Central Bank of Jordan, emphasised the importance of strong regulatory frameworks in supporting factoring and supply chain finance in Jordan, commenting: “The Central Bank of Jordan will continue to work on developing legislation, regulations and supervisory frameworks in line with international standards and best practices. This will help improve the spread of financial services and encourage innovation in these services, ensuring they are offered with high quality and at reasonable cost.”
Speakers also shed light on the EBRD’s Trade Facilitation Programme and SME Finance & Development, underlining the role these initiatives play in promoting economic growth and fostering financial inclusion.
The EBRD TFP was established in 1999 with a view to promoting international trade between the economies in which the Bank operates, through guarantees and short-term loans to selected participating banks and factoring companies.
Since 2012 the EBRD has provided more than €2 billion through 71 projects in Jordan, of which 71 per cent are in the private sector, including financial support to the Jordanian banking sector through MSME loans, subordinated debt and trade finance facilities.