1 / 19

A well developed service sector

Financial and insurance sectors in Jordan: the way forward National Conference Harnessing Services for Sustainable Development: Opportunities and Challenges for Jordan 21 – 22 September 2010.

omar
Download Presentation

A well developed service sector

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Financial and insurance sectors in Jordan: the way forwardNational ConferenceHarnessing Services for Sustainable Development: Opportunities and Challenges for Jordan21 – 22 September 2010

  2. A missing link?Banking sector snapshotImproving the financial ecosystemJEDCO JSMP Access to FinanceGoing further

  3. A well developed service sector • Financial Sector is THE interlinked service sector • Measure of financial development • Monetary sector and monetary policy • Regulation and supervision • Banking sector • Non bank financial sector • Institutional environment • Contribution to the economy (2009) • 8.9% of GDP in 2009 24,000 employees (3% but qualified) • 18% of total merchant services Direct Export contribution to SerSec • Main players • 28 banks (4 Islamic / 10 foreign) – 600 branches - 26 insurance companies • Bk Assets: JD33 bn – Premium: JD330 m – 165 listed companies: JD20 bn • => Focus on interlinkage: ACCESS TO FINANCE IMF Comprehensive Financial Development Index (CFDI) ranks Jordan second after Lebanon in the MENA region

  4. But is a link missing? • Ranked 127/183 for access to credit (Doing Bus. 2010) • Contrasts with the WEF Financial Development index (25 / 55) • Other indices are in preparation (OECD) • => What impede the financial sector from doing better? • => Despite its modest size, the FinSec is the blood of SerSec

  5. A missing link?Banking sector snapshotImproving the financial ecosystemJEDCO JSMP Access to FinanceGoing further

  6. How performing is the banking sector ?

  7. Is the service sector well served? => A support in line with importance of the SerSec

  8. KFS: Strong regulator / prudent risk mgt => Resilient sector positioned for growth

  9. A missing link?Banking sector snapshotImproving the financial ecosystemJEDCO JSMP Access to FinanceGoing further

  10. Is banking finance accessible enough?

  11. What about alternative financings?

  12. Improving the financial ecosystem Framework: Euro-Mediterranean Charter for Enterprise / JSMP FSSD

  13. A missing link?Banking sector snapshotImproving the financial ecosystemJEDCO JSMP Access to FinanceGoing further

  14. Banking Window ProgrammeProviding SME financial intermediation services The Banking Window offers three key services Aimed at facilitating access to finance for services SMEs Increasing company’s readiness (systems) Access to competitive bank / equity financing (financial intermediation) Better use of and access to collateral / improvement of financial terms(negotiation). In-house advisory and coaching Production of credit report External technical assistance Introduction to JEDCO network of financial institutions (MOU)

  15. Venture Capital ProgrammeDeveloping innovative financial instruments Cabinet decision: establish 2 Funds Venture Capital and Developt Co-sponsored by GoJ and the European Investment Championing a VC tax friendly environment in line with international competition Selecting managers according to strict process Assisting in structuring and fund raising Early Stage Fund: 10-15 Meuros - GoJ / EIB pre- committed 3 Meuros - 30% to 60% of min. Capital for Growth Fund: 30 to 50 Meuros (min. 20) - GoJ / EIB pre-committed 7 Meuros 35% of minimum size

  16. Services SME loan guaranteesStrengthening borrowers’ creditworthiness JSMP LT loan guarantee facility. 60% default coverage<Euro75k Delegation to banks (small dossiers) Implementing body: JLGC (under discussion) Assessment of the situation in Jordan showing huge gap Assistance to the development of the business plan Study tour (Lebanon and France) Technical documentation Follow-up of EUR6m fund Need to ensure high impact High leverage Incentives for banks Fast decision process Why not burning the fund? Extra-incentives

  17. SME Financing Advisory CommitteeProviding policy input Stakeholder committee focusing on SME financing Fed with practical surveys (sector needs, international practices, innovative instruments) Issuing recommendations Proves to be efficient (Turkey, Lebanon, Morocco) Gathers stakeholders Recommendations at all levels Advisor for Gvt. and donors finance Identify a hosting body for the initiative Concept note drafted and validated Stakeholders mobilized Preliminary list of feeding studies (e.g. Factoring) Difficulties in finding proper hosting body

  18. A missing link?Banking sector snapshotImproving the financial ecosystemJEDCO JSMP Access to FinanceGoing further

  19. Going further

More Related