- Business Opportunities Lebanon
- Business Opportunities Morocco
- Business Opportunities France
- Business Opportunities Jordan
- Business Opportunities in Mediterranean
Music Shop
Iloubnan - information portal on Lebanon
- Rental France
- Web agency France
Sole Agent for Philips & Whirlpool in Lebanon
Nsouli - Jewelry Lebanon
- Real Estate Lebanon
- Swiss watches manufacturing
- André Marcha
- Car Rental Beirut Lebanon
- Swiss made watches
- Car rental Tunisia

Back to archives
Back to news
French Version

Jordanian SME s : Still a step ahead

Small and medium enterprises (SMEs) in Jordan remain buoyant despite mounting economic and social hardships. These enterprises are booming mainly in rural areas where rates of poverty and unemployment are highest. Economists agree that SMEs play a pivotal role in the socio-economic fabric of Jordan.

An SME is defined as company employing between five to 250 employees, in industrial or commercial sectors. These enterprises offer most jobs and stimulate economic development.

Although there is no formal statistic of how many SMEs are currently functioning in Jordan, the concept spreads out well among the young generation, which believes such businesses would eventually help alleviate financial hardships. But challenges are still in the way, since many of these enterprises lack the required IT-based systems, suffer the limited access to formal financial services and endure increasing competition from foreign products coupled with inefficient marketing and promotional skills.

Jordan’s free trade agreements with Europe and the United States would be the most challenging motives for local SMEs. Despite the great opportunities that these agreements would present to these enterprises, nevertheless they threaten the viability of enterprises in the services and manufacturing sectors.

A recent study by the Arab Advisors Group indicated that more than two-thirds of the local SMEs utilize IT-based infrastructure. The study indicated that these SMEs have boosted productivity and efficiency. There are many international consultative institutions familiar with SMEs in Jordan and provide them with their need of technical and financial support.

These include the European-Jordanian Action for the Development of Enterprises (EJADA) and the US Agency for International Development (USAID). EJADA already introduces much support and assistance for the SMEs since it was first initiated in 2001. The program helped in upgrading the competence and proficiency of hundreds of SMEs in Jordan, covering all potential sectors in the fields of industry and commerce. “Our main objective is to upgrade the capacity building of all SMEs to make them more effective on the global scene,” said Shireen Hijazi, EJADA’s public relations officer. “By focusing on the SMEs in Jordan, we directly address the private industrial sector, that involves the fields of services and manufacturing.”

Hijazi agrees that many of the SMEs in Jordan still lack a better business infrastructure and fall short of proper financial support. With this, she noted that EJADA always acts upon the SMEs’ initiatives. “Once we receive the applicant, we start assessing his/her business, and work on a plans through our consultants who diagnose the ills,” Hijazi explained.

Following diagnosis, the consultants start implementing the actions required to ensure a business’ development. Hundreds of local businessmen and entrepreneurs joined the program through its awareness campaigns and training courses on enhancing productivity in small and micro businesses.

EJADA is a five-year local corporate identity initiated by the European Commission, in cooperation with the Jordanian government at a budget of 41.6 million euros. Despite the EU-backed “Industrial Modernization Program”, EJADA introduces better chances for the local SMEs to set their feet in the European markets and be at a competing level with their Europe.

The EU modernization program aims at enhancing growth in the small and medium industries located in the Mediterranean region. Tailored technical assistance is provided through a range of programs, including cluster development; export promotion, sector studies and international benchmarking.

Over the past few years, both the public and private sectors did much to support local SMEs, including programs that facilitate the access to information, counseling, and most importantly, access to credit and financial resources. Inadequate credit and capital money become serious impediments to the success of small and medium enterprises.

EJADA is already acting as a facilitator with local banks to finance SMEs . Hijazi indicated that EJADA is working on certain initiatives that help in bridging the gap between banks and SMEs. “Banks are traditionally reluctant to finance SMEs because of lack of collateral the Jordan Loan Guarantee Corporation, in which up to 70 percent of the lend is covered by a special fund financed by EJADA. The remaining 30 percent should be paid by the client,” she explained. Loans between JD 20,000—250,000 for new investment in premises, machinery and equipment are eligible for the scheme, where the borrower can demonstrate a viable feasibility study and an ability to meet repayments. Asked if the program is prepared with the financial hardships that may emerge in the SMEs’ functioning, Hijazi said the program would stay in contact and assess the enterprise all the way until reaching the end of the loan. EJADA succeeded in introducing itself to the needy SMEs through four headquarters distributed around the Kingdom; in Amman, Zarqa, Irbid and Aqaba.

The program still attracts more applicants, who should first meet EJADA’s criteria: To be a Jordanian-based company with no less than two years registration at the Ministry of Trade and Industry. Eligible SMEs should also be industry-oriented. Besides, the UN Industrial Development Organization (UNIDO) also provides assistance through its Investment Promotion Unit, which is located at the Jordan Investment Board.

The Italian Investment and Technical Promotion Office sponsor the unit, which implements programs of both technical and financial components. UNIDO has launched recently a credit line for local SMEs, providing them with information on industrial opportunities, norms and effective regulations in Jordan. The unit is currently targeting pharmaceuticals, olive oil, dimension stones, and Dead Sea cosmetics.

SMEs working in these fields are set to grow and flourish in the coming few years, according to Arub Brauah, the chief consultant at UNIDO office in Amman. He noted that the unit helped many SMEs define their objectives for the future. This, he said, pushed enterprises to improve and promote their exports, both regionally and internationally.

Brauah pointed out that UNIDO began its activities in Aqaba recently to find out potential outlets, notably in fields of technology and services. Both Brauah and Hijazi agreed that many SMEs would find it hard to disclose their hardships to the concerned institutions. But they warn that unless the SMEs introduce themselves publicly, they will soon vanish. A new initiative was set off recently called “Jordanian Upgrading Modernization Program”, better known as JUMP.

This initiative is run by the private sector in Jordan, representing the leading industrial and commercial sectors, and will take over from EJADA in 2006. Hijazi pointed out the initiative would help “filter the existing SMEs in Jordan to identify those that are capable and efficient enough to stay in the fierce competition with Europe, when the free trade agreement goes effective in 2014.”

Amman,04 13 2004
Ghassan Joha
The Star
ebizproduction is supported by "Le Conseil Régional de la Région
Provence-Alpes-Côte d'Azur".
| Home | Version française | contact@1stmediterranean.com | © ebizproduction - Web Agency - 2001/2008 |