Financial Services
From The Report: Jordan 2018
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Regulatory reforms aimed at implementing interna¬tional best practices across banks, capital markets and the insurance industry have been undertaken in Jordan’s financial services sector, which already benefits from stable, well-capitalised and profitable lenders, and rapid growth and diversification in Islamic financial services. Yet, there remains room for improvement. The majority of the population is still unbanked and overall financial inclusion is low. Meanwhile, many businesses have difficulty accessing credit, despite growing concerns over excess liquidity, although rising government and donor investment in new lending programmes could see financing to small and medium-sized enterprises improve considerably in 2018. This chapter contains interviews with Ziad Fariz, Governor, Central Bank of Jordan; Iyad Asali, General Manager, Islamic International Arab Bank; and Nemeh Sabbagh, CEO, Arab Bank.

Articles from this Chapter

Overview

Steady trajectory: Ongoing reforms and new programmes are driving progress
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Regulatory reforms aimed at implementing international best practices across banks, capital markets and the insurance industry have been undertaken in Jordan’s financial services sector, which already benefits from stable, well-capitalised and profitable lenders, and rapid growth and diversification in Islamic financial services. Yet, there remains room for improvement. The majority of the population is still unbanked and overall financial inclusion is low. Meanwhile, many businesses have difficulty…

Interview

Financial inclusivity: Ziad Fariz, Governor, Central Bank of Jordan (CBJ), on making financial services accessible for the whole nation
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Interview:Ziad Fariz What steps has the CBJ taken to align itself with the national digitisation strategy? ZIAD FARIZ: Over the past five years the CBJ has developed and digitised many services varying from retail payments, like electronic bill payments and mobile transfer systems, to wholesale liquidity management instruments. Within these initiatives, the CBJ has focused on making these services available for both the banked and unbanked population, which includes more than 200 services…

Analysis

Electronic solutions: The central bank is partnering with local entrepreneurs to develop innovative financial technology offerings
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The rapidly evolving financial technology (fintech) industry is emerging as one of the most vibrant segments of the global financial services sector, collecting over $22bn in investment in 2015 – a figure that is expected to grow exponentially. The usefully disruptive effect of new products and services has raised competition levels and compelled incumbent institutions to innovate their offerings across a range of sectors, a trend which has enhanced the consumer experience and helped drive financial…

Analysis

Power of bonds: Sharia-compliant lenders are poised to expand credit, while Islamic bonds offer alternative financing opportunities
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Still comprising a small portion of the financial services sector, Islamic finance is set to play a much bigger role in Jordan’s economic development by supporting financial services diversification and offering a potential solution to limited credit access and excess liquidity. The segment currently comprises four banks, three of them Jordanian and one foreign. The country’s first Islamic bank, Jordan Islamic Bank (JIB), was established in 1978 and now holds a 60% share of the domestic Islamic…

Interview

No longer underserved: Iyad Asali, General Manager, Islamic International Arab Bank, on the rise of Islamic financial services
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Interview:Iyad Asali How would you assess the capacity for further growth in the Islamic banking segment? IYAD ASALI: The Central Bank of Jordan (CBJ) reported that 69% of the population in Jordan are financially excluded. This gives Islamic banks an opportunity to develop new financial services for this segment at reasonable costs, along with easy terms and conditions for their clients. Islamic banks’ global portfolios and revenues have been growing steadily over the past few years, and…

Interview

Increasing access: Nemeh Sabbagh, CEO, Arab Bank, on efforts to keep interest rates competitive and to facilitate business financing
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Interview:Nemeh Sabbagh How will the central bank’s increased interest rates affect liquidity and demand for loans? NEMEH SABBAGH: Banks have followed the interest rate increases set by the Central Bank of Jordan (CBJ), sometimes with a lag, to reflect higher rates. As businesses and households also adjust with a lag, the full impact of increased interest rates will become clearer. In addition to the delayed response, recent experience has shown other factors to be more dominant than interest…