The European Bank for Reconstruction and Development (EBRD) has extended a significant financial boost to the Housing Bank for Trade & Finance (HBTF) in Jordan. This unsecured loan of $75 million aims to bolster lending activities targeted at small and medium-sized enterprises (SMEs). Disbursed over three equal tranches, this five-year loan includes a two-year grace period, designed to enhance access to finance for underserved SMEs in Jordan. The initiative aligns with EBRD's strategic objectives to promote sustainable economic development and support HBTF’s expansion of its SME portfolio. By addressing the critical funding gap faced by local businesses, this project seeks to stimulate economic growth and resilience.

Jordanian SMEs form the backbone of the country’s economy, representing 95% of all active businesses and contributing significantly to GDP and employment. Despite their importance, these enterprises face substantial challenges in securing financing, with bank loans to SMEs constituting only about 11% of total lending. The EBRD loan will help bridge this gap by enabling HBTF to expand its lending capabilities. Established in 1973, HBTF is one of Jordan’s leading financial institutions, boasting an extensive branch network across the country and abroad. As the second-largest bank by assets, it plays a pivotal role in supporting various sectors, including retail, corporate, government, and public entities.

The project's transition impact is rated at 60 on the Environmental Transition Impact (ETI) scale, highlighting its potential to foster competitive and resilient business practices. By promoting prudent lending and maintaining high portfolio quality, the loan will not only aid HBTF in expanding its SME portfolio but also ensure that funds are allocated responsibly. Additionally, the environmental and social management systems of HBTF are aligned with international best practices, ensuring that sub-projects adhere to stringent standards. HBTF is committed to integrating environmental and social criteria into its credit policies and regularly publishes annual reports detailing its performance.

Furthermore, HBTF is actively preparing a climate transition plan under an ongoing regional program, demonstrating its commitment to sustainability. The bank must continue enhancing its environmental and social management system to effectively manage risks associated with its projects. Sub-borrowers financed through HBTF’s loan must comply with national environmental, health, safety, and labor requirements, ensuring responsible business practices.

This strategic partnership between EBRD and HBTF underscores the importance of fostering a robust SME sector in Jordan. By providing much-needed capital, the initiative aims to unlock new opportunities for local businesses, driving economic growth and resilience. The collaboration also highlights the significance of sustainable banking practices, setting a benchmark for other financial institutions in the region. Through this loan, HBTF can further solidify its position as a leader in supporting SME development, ultimately contributing to Jordan’s broader economic objectives.