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Campaign to promote small business loans

By Omar Obeidat - Jan 13,2014 - Last updated at Jan 13,2014

AMMAN –– Authorities will soon launch a promotion campaign to encourage more Jordanians across the country to apply for small business loans, which, according to officials, has become easier.

At a press conference on Monday, Planning Minister Ibrahim Saif said the campaign will mainly target residents of poverty pockets and remote areas, in addition to Jordanians outside the capital who have business ideas.

The lending scheme will be implemented by the Planning Ministry’s Enhanced Productivity Centres project (IRADA), the Development and Employment Fund (DEF) and the Jordan Loan Guarantee Corporation (JLGC).

Loans with low interest rates will be extended by the DEF, while IRADA will act as a helping arm for entrepreneurs by conducting feasibility studies on their business ideas and offering technical and marketing services throughout the project.

The JLGC will cover nearly 70 per cent of the guarantees needed by the lending institution to make loans easier and more accessible, Saif explained.

In a bid to encourage more people to apply for credit facilities, the minister said the DEF has cut down its interest rates from 5 per cent to 4 per cent for potential beneficiaries in poverty pockets, adding that interest rates can go down to 3 per cent for entrepreneurs in Maan.

The maturity period was also extended from six years to seven years for projects in poverty areas, while it will be eight years for entrepreneurial projects.

The grace period will be 12 months instead of six months, Saif noted, adding that loans worth JD18 million have been extended to beneficiaries.

Over the past, more than 4,500 projects received financing from the lending scheme, creating over 7,500 permanent employment opportunities, the minister said.

JLGC Director Mohammad Jafari said interest rates for projects outside Amman are always lower than for those implemented in the capital, but demand on loans for small- and medium-sized enterprises is still higher in Amman.

“There are many people across the country who have good business ideas, but are in need of soft loans,” Saif said, adding that the promotion programme seeks to increase the awareness of governorates’ residents about the credit facilities extended by the initiative. 

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