Financial Inclusion Diagnostic Study in Jordan 2017, Synthesis Report © 2017 Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and Central Bank of Jordan A2mman, Jordan | December, 2017 As a federally owned enterprise, GIZ supports the German Government in achieving its objectives in the field of international cooperation for sustainable development. The program “Promotion of the Microfinance Sector in the MENA Region” / “Promot- ing financial inclusion through improved governance and outreach of Microfinance in Jordan” is carried out by GIZ with funding by the European Union (EU) and by the German Federal Ministry for Economic Cooperation and Development (BMZ). The views expressed here do not necessarily reflect the official opinion of the EU or BMZ. Published by: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Marouf Al Rasafi Street, Building 19, Shmeisani P.O. Box 92 62 38, Amman 11190, Jordan T: +962 6 5692153 E: [email protected] I: http://microfinance-mena.org Central Bank of Jordan (CBJ) King Al Hussein Street 60 P.O. Box 37, Amman 11118, Jordan T: +962 6 4630301 E: [email protected] I: http://www.cbj.gov.jo Produced by: Business & Finance Consulting Max-Högger-Strasse 6 8048 Zurich, Switzerland T: +41 44 784 22 22 E: [email protected] I: http://www.bfconsulting.com Responsible: H.E. Dr. Maher Sheikh Hasan (Deputy Governor, CBJ), Hayder Al-Bagdadi (Head of Project, GIZ), Bilal Yan Hagen (Team Lead, GIZ) Authors: Peter Hauser, Dan Pavelesku, Artur Vacarciuc (Business & Finance Consulting) Support: Amr Ahmad (CBJ), Atilla Kaiser-Yücel (GIZ) Reviews: Maha Al Abdallat, Aktham Abuassi, Mohammed Amaireh, Maha Bahou, Haneen Al Muhaissen, Dr. Waleed Al-Qasrawie, Nibal T. 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Financial Inclusion Diagnostic Study in Jordan 2017 Table of Contents Executive summary ................................................................................................................ 7 Financial access .................................................................................................................................................... 7 Regulatory framework ....................................................................................................................................... 10 Payments, transfers and remittances ................................................................................................................ 10 Microfinance ...................................................................................................................................................... 11 SME finance ....................................................................................................................................................... 11 Financial literacy and education ........................................................................................................................ 12 Consumer protection ......................................................................................................................................... 12 Niche, emerging and other industries ................................................................................................................ 13 Conclusions and recommendations ................................................................................................................... 13 1 Introduction ................................................................................................................. 15 1.1 About financial inclusion in Jordan ....................................................................................................... 15 1.2 About this report ................................................................................................................................... 15 2 Financial access ............................................................................................................ 17 2.1 Overview ............................................................................................................................................... 17 2.2 By product ............................................................................................................................................. 20 2.3 By segment ............................................................................................................................................ 33 2.4 By access point ...................................................................................................................................... 45 3 Regulatory framework .................................................................................................. 51 3.1 Banking sector ....................................................................................................................................... 51 3.2 Microfinance sector .............................................................................................................................. 52 3.3 Payments and digital financial services ................................................................................................. 53 4 Payments, transfers and remittances ............................................................................ 57 4.1 General market overview ...................................................................................................................... 57 4.2 Digital Financial Services (DFS) .............................................................................................................. 60 5 Microfinance ................................................................................................................ 66 5.1 Measurement of financial inclusion ...................................................................................................... 66 5.2 Constraints to financial inclusion .......................................................................................................... 67 5.3 Target segments .................................................................................................................................... 69 5.4 Products and policies ............................................................................................................................ 70 5.5 Funding .................................................................................................................................................. 73 5.6 Non-credit products .............................................................................................................................. 73 5.7 Informal finance and other competitors ............................................................................................... 74 6 SME finance .................................................................................................................. 77 6.1 Constraints to financial inclusion .......................................................................................................... 77 6.2 Target segments and eligibility criteria ................................................................................................. 78 6.3 Credit products ...................................................................................................................................... 79 6.4 Non-loan products ................................................................................................................................ 82 7 Financial literacy and education .................................................................................... 85 7.1 Financial literacy and behavior ............................................................................................................. 85 7.2 Financial education ............................................................................................................................... 87 8 Consumer protection .................................................................................................... 89 8.1 Overview and key constraints ............................................................................................................... 89 8.2 Regulations ...........................................................................................................................................