Project detail - JORDAN MICRO FINANCE COMPANY LTD NA

JORDAN MICRO FINANCE COMPANY LTD NA

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Who is our client

Tamweelcom, which was established in 1999, is the third largest microfinance institution in Jordan. Its mission is to support employment, foster socio-economic stability and empower low-income individuals in Jordan. One of its target groups are youth and women entrepreneurs. Tamweelcom benefits from a strong market positioning via its wide network of branches across Jordan, particularly in the smaller urban areas.

Funding objective

In 2020 and 2021, Tamweelcom’s lending activity was limited to well-performing clients. In addition, portfolio quality deteriorated due to a less favorable risk environment under Covid-19 lockdown measures. FMO’s USD 10mln Risk Sharing Facility and Capacity Development support should enable Tamweelcom to continue supporting its clients and reach additional micro/small business in line with its social mission. In addition to being underserved by local banks, this segment's income stream is highly vulnerable to Covid-19 restrictions.

Why we fund this project

This transaction with Tamweelcom aligns with our strategy to support SME lending in Jordan where SMEs account for a large part of private sector employment while only receiving a minor share of facilities from Jordanian banks (9% only in 2018). Unemployment is around 47% for Jordanian youth and 23% for women. The proposed transaction is therefore highly inclusive as it will cover SMEs affected by Covid-19 with a focus on women and youth owned SMEs.

Environmental and social rationale

Tamweelcom is categorized as E&S C-risk, given the relatively small loan sizes (particularly related to the guaranteed loan portfolio). Tamweelcom applies the IFC Exclusion list and has an E&S policy in place (implemented in 2013 with IFC). It applies the IFC PS risk categorization. In the current loan portfolio, 87% is categorized as C (mostly Retail), 13% as B (Micro and Small Enterprises e.g. working in small industry, construction, poultry) and no A-categories.

More investments

Date Total FMO financing
6/29/2022 JOD 6.56 MLN
Website client
http://www.tamweelcom.org
Region
Asia
Country
Jordan
Sector
Financial Institutions
Signing date
6/29/2022
Total FMO financing
JOD 0.18 MLN
Fund
MASSIF
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
C