JORDAN MICRO FINANCE COMPANY LTD NA
Status: Approved investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
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.
What is our 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 do we fund this investment?
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.
What is the Environmental and Social categorization 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 0.18 MLN |
- Website customer/investment
- http://www.tamweelcom.org
- Region
- Asia
- Country
- Jordan
- Sector
- Financial Institutions
- Publication date
- 12/29/2021
- Effective date
- 6/29/2022
- Total FMO financing
- JOD 6.56 MLN
- Funding
- FMO NV
-
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