• Microfinance
  • Microfinance regulation and supervision
Jan 22, 2014

Sanad and Tanmeyah discuss “Responsible growth models for microfinance in a competitive environment” together with key stakeholders in Amman.

On 11 December 2013, the SANAD Fund for MSME (SANAD) and Tanmeyah, the Jordan Microfinance Network, jointly organized a roundtable on “Responsible growth models for microfinance in a competitive environment” held in Amman. The event brought together different governmental bodies, development agencies, microfinance practitioners and international senior experts to discuss the status and trends in the Jordanian microfinance sector.

Looking at the microfinance industry in Jordan, two key challenges need to be addressed, as Ms. Majdoulin Abu Dalhoum, Head of Civil Society Institutions and Microfinance Section at the MOPIC, underscored: “We need to ensure the availability of reliable sector data, and work jointly to enhance financial education and raise the loan customers’ awareness and strengthen their financial capability, and that includes helping clients and especially those with low incomes to behave responsibly and protect themselves.”

During the workshop, it was generally agreed that the initiatives on the policy level can be complemented by a self-regulatory approach on the institutional level with regard to responsible finance practices. However, the self-regulatory approach has its limits and challenges, as Mr. Thomas Rahn, Microfinance Policy Advisor in the GIZ Programme for the Promotion of the Microfinance Sector in the MENA Region, pointed out: “The impact of self-regulation depends on the voluntary commitment of sector members. Success depends on there being a strong legal framework in place.”

In his closing words, Dr. Klaus Maurer spoke on behalf of the SANAD Fund, emphasizing that “responsible finance is the basis for sustainability.” He added that “SANAD promotes responsible finance not only through direct technical assistance and sector events, but also by integrating it into its investment strategy.”

SANAD was initiated and funded by KfW Development Bank with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Union in August 2011, the SANAD Fund for MSME (SANAD) provides medium and long-term debt, guarantees, stand-by facilities and equity financing to commercial banks, microfinance institutions and other financial institutions in the Middle East and North Africa (MENA) region. The purpose of SANAD is to strengthen the local micro, small and medium enterprise (MSME) sector and financial markets in line with the principles of responsible finance.

The Jordan Microfinance Network – Tanmeyah – is a non-profit institution. It represents microfinance institutions (MFIs) in Jordan. Tanmeyah plays an active role in supporting the further development of the microfinance industry, providing advocacy and raising awareness on behalf of its members, promoting information and dissemination of developments and trends in the industry. Most importantly, it supports the implementation of an appropriate regulatory environment, and will gather performance and benchmarking data for the sector.

By Rania Abu Rabie