• Established in 1978 as a public shareholding company

• One of the fastest growing banks in Jordan; grew at double or triple

the market rate over the last 3 years

• Growth Rate (BaE vs. Total Market)

About Bank al Etihad

Deposits 2012 2013 2014( Aug)

Total Market 2.40% 10.51% 5.55%

BaE 9.16% 27.34% 12.34%

Facilities 2012 2013 2014( Aug)

Total Market 12.40% 6.30% 1.34%

BaE 17.00% 19.60% 7.41%

• Traditionally a strong corporate bank

• Strategic direction to diversify into certain segments of Retail

• Launched major rebranding campaign in 2011 and completely

revamped branch environment and experience.

• Strategic direction to grow in SME, today SME deposits constitute

around 4.5% of total bank deposits, SME credit facilities make around

8% of total facilities. Plan to increase SME to constitute 20-25% of

portfolio in the next 3-5 years.

• 100,000+ SMEs in Jordan

• 97% of all companies in Jordan are SMEs

• SME contribute 50% or more of GDP

• Employ 60% of the Jordanian workforce

• Account for 70% of new jobs and 45% of exports

Despite the importance of SMEs to the economy, there is still a large

financing gap:

• Total current financing for SMEs is estimated at USD 2 billion

• SME financing gap is estimated at another USD 2-3 billion

SME in the Economy: Facts and Numbers

Access to Finance:• Loan Guarantee Programs• SME Finance Facilities and Programs

Access to Information: • Credit Bureau • SME Financial and Nonfinancial Advisory Services

Access to Markets

Legal and Regulatory Framework• Movable Asset Registry , Securitization Laws…

While Jordan has made significant strides within each enabler, certain challenges remain.

Ecosystem /Key Enablers

• Government Programs and Initiatives• Central Bank of Jordan• OPIC• IFC• EBRD• World Bank• EIDB

Recent Focus on SME in Jordan

Loan guarantee programs are currently offered to banks through 2 main organizations:

• Jordan Loan Guarantee Corporation (JLGC)

• Overseas Private Investment Corporation (OPIC)

Loan Guarantee Programs in Jordan

• JLGC and OPIC programs were both successful in catalyzing SME

financing in Jordan

• Tangible benefit for SME clients through reduction of collateral

requirements; addressed one of largest obstacles facing SMEs

• Increased financial awareness and understanding among SMEs

through numerous training workshops

• Continuous outreach to bank staff to offer additional services and

support (e.g. staff training, marketing materials)

Loan Guarantee Programs: Successes

• Created successful linkages between banks and SME clients

through conferences and other events

• Joint client visits to provide comprehensive solutions to SMEs

(financing and guarantee)

• Better information about SME clients through JLGC and OPIC

database

• Maximum guaranteed amount per client through all banks is low (JD

100,000) – JLGC

• Increase loan guarantee amount for critical sectors to match Industry

• Loan guarantee is non-transferable between banks, restricting

freedom of choice for clients

• Operating on case by case basis

Loan Guarantee Programs: Challenges

• Sharing other collateral in event of default could stop further expansion

with client – JLGC

• Concern regarding confidence in payment in event of default

• High commission rate restricts goal of reducing cost of borrowing for

SMEs

• CBJ has provided continuous and sustained support to SMEs

through various financing programs

• MSME Finance Facility enabled banks to reach new sectors/segments

they could not previously reach

• Medium-Term Finance Facility was successful in facilitating financing for

the manufacturing, tourism, and renewable energy sectors at

preferential rates and flexible terms for SME clients

SME Finance Facilities: Successes

• SME financing needs to be sustainable

• Concept of risk based pricing

• Currency of lending programs

• Amount of funding available to banks is small compared to market

demand

• Certain programs offer financing facilities in foreign currency

• Medium-Term Finance Facility (through CBJ) is limited to 3 sectors

(tourism, manufacturing, and renewable energy)

SME Finance Facilities: Challenges

• Established dedicated SME banking department

• Entered into partnership with IFC to design and implement a new SME

strategy

• Created specialized SME business centers to service all client needs

• Team

• Offers financial and non-financial solutions and services; 360-degree

approach to SME banking

Bank al Etihad and the SME Sector

• One of the first banks to join the OPIC loan guarantee program

• BaE has the largest portfolio of OPIC-guaranteed loans

• Recently updated partnership with JLGC through new agreement

targeting SMEs

• Fully utilized allocated portion of MSME Finance Facility (World

Bank/CBJ)

• In discussions to enter new partnership with EBRD

• Bank al Etihad recently launched its first annual SME Awards to

recognize and reward SMEs and entrepreneurs

• 3 Award categories:

Best SME (JD 25,000)

Business Woman of the Year (JD 25,000)

Best Startup (JD 10,000)

• 4 main evaluation criteria:

Financial Strength/ Sustainability /Creativity /Social Impact

• Winners announced in awards ceremony on 18/11/2014

Bank al Etihad SME Awards

The Awards Ceremony

12 Finalists (4 in each category)

• 25% of businesses in Jordan are women-owned

• Only 5% of women-owned businesses are well-served by banks

• Financing gap of for women-owned business

• While unemployment rates are higher among women, more than

55% of all unemployed women are educated

• Enhancing women’s participation in the national economy directly

impacts Jordan’s economic growth

Why is BaE targeting Women?

• 45% of Bank al Etihad team are women

• Women representation in top management

• Band values and culture

• Equal rights and benefits

• Member of GBA

BaE recently announced the launch of its Shorouq Program:

• Comprehensive banking solutions and non-financial services

specifically designed for women across Jordan

• Targets women in various segments: employees/professionals,

business owners (SMEs), entrepreneurs, and in financial planning

• Seeks to support women in gaining access to funding, knowledge and

markets

• Online portal launched as an advisory/networking tool for women

• BaE is a member of the Global Banking Alliance for Women (GBA)

How does BaE support Women?

Please visit:

https://shorouq.bankaletihad.com/