Al-Qadi: The “Central Bank” program for small and medium-sized companies is proceeding as planned

The chairman of ABJ, Hani Al-Qadi, stated that the implementation of the Central Bank soft financing program for small and medium-sized companies launched with a volume of 500 million Dinars to confront the Corona crisis with a guarantee by the Jordan Loan Guarantee Company is proceeding as planned according to the program’s objectives and controls.

He said that the aforesaid program has clear instructions by the Central Bank and aims to facilitate financing for professionals, craftsmen, owners of individual institutions and small and medium-sized companies whose employees are less than 200 workers. He indicated that 85% of the financing is guaranteed by 85% Jordan Loan Guarantee Company and Banks bear the 15% risks.

He said that, to date, the number of requests received by banks has reached about 2,950 with a total value of about 340 million Dinars while the number of companies that completed their requests and benefited from the program is about 600 companies who received 80 million Dinars, with an average 130 thousand Dinars loan. 55% of these loans are disbursed as salaries directly to the employees’ accounts. The government’s decision to bear the interest of this part has encouraged companies to pay salaries and maintain their employees.

Al-Qadi stressed that banks, according to the program, initially study the credit request and its consistency with the instructions of the program and conduct analysis and credit study according to the professional bases and powers applicable to each bank. He said that previous loans should not be financed and that the program is actively monitored by the Central Bank to ensure the banks’ commitment to speedy implementation and to all instructions and conditions.

Banks’ work in this field calls for assessing the solvency of clients, reviewing their credit history, and ensuring their ability to meet the loan’s future obligations. There are several cases of companies suffering from credit problems, such as the multiplicity of existing funds, delays on several previously granted loans, or the presence of many unpaid financial cases or claims. Honesty and professional responsibility requires not to finance these companies, with the banks certainty that the customer is unable to pay.

Al-Qadi pointed out that banks have taken other measures to support companies and individuals, as they have, in line with the Central Bank’s instructions, postponed the installments of retail and corporate customers during March and April amounting to approximately one billion Jordanian Dinars (400 million for individuals), for about 400,000 customers.

Banks, in line with the Central Bank’s decisions to reduce interest rates on monetary policy tools, reduced the interest rates on the installments of facilities for individuals and small and medium-sized companies, starting from May 2020, with a total of 1.5%. 270 thousand borrowers benefited from this reduction, and banks sent text messages to them showing the value of the reduction in the customer’s premium.

Al-Qadi said that the Central Bank financing programs the postponement of installments as well as banks accelerating the reversal of the impact of monetary policy on the installments of borrowers will enable companies to continue their work easily and maintain their employees as it will provide retail customers and individuals with great liquidity for spending in the market. This will stimulate economic activity and help speed economy recovery.