Ayoubi told The Jordan Times that although official figures show credit facilities to the industrial sector increasing in 2009, small and medium enterprises SMEs) are struggling to get loans. “Many SMEs are complaining about the restrictions imposed by banks on credit facilities,” he said, adding that some companies are having difficulties funding their export operations…According to Central Bank figures issued late last month, credit facilities to the industrial sector increased by JD26.6 million to JD1.62 billion during the first two months of 2009 compared with JD1.59 billion at the end of 2008. “We are concerned that although loans to large companies may have increased, the number of loans to SMEs seems to have dropped,” Ayoubi explained, noting that the Kingdom’s SMEs employ around 200,000 workers…
“Saed Abu Yahia, director of a medium-sized pharmaceutical manufacturing company, said that bank procedures nowadays take a long time when applying for loans. He said that although his company, which employs 23 people and exports products worth JD2 million per year, might eventually get the same volume of loans if collaterals are secured, the application to be approved by banks, which used to take a few days, now takes weeks…Ayoubi warned that banks’ strict lending measures may force some SMEs to close down because of financial deficits. “There are successful small and medium companies in the market which should be supported by liquidity at this critical time due to the financial crisis,” he noted…However, Dana Bayat, head of the Jordan Garments Accessories and Textiles Exports Association, said that even large companies in the textile sector are having difficulties obtaining loans. There are limitations on the volume of lending facilities and on letters of credit, Bayat said, also pointing out the high interest rates on loans…Garment sector exports dropped by 19 per cent totalling JD96 million during the first two months of this year compared to JD119 million last year, while pharmaceutical sector exports dropped by 27 per cent from JD60 million to JD44 million….
Date:4/25/2009
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