JORDAN: To serve the growing demand for Shariah compliant financing in the Middle East, Jordan-based Ethmar for Islamic Microfinance is planning to expand in the region within the next three to five years and is seeking funding to achieve its project.
“We are going to study where it is best to expand our footprint. We do not have any preference yet. However, Egypt is an interesting market as it is the largest neighboring country where the demand for Islamic microfinance is high. In comparison, Lebanon is a small country, Syria is at war and Iraq remains unstable,” Ziad Al Refai, CEO of Ethmar, told IFN.
The Islamic microfinance company is targeting to have 25,000 clients and a financing portfolio amounting to US$38 million by 2020 from the respective 3,000 and US$4 million currently. “In Jordan only, the potential of Islamic finance is important as about 30-40% of the population reject conventional finance for religious reasons. In some cities it reaches 70%,” shared Ziad.
However, raising funds to finance its growth plan could prove challenging. “There are 29 banks operating in Jordan but only two are offering Shariah compliant products and services. This limited number of players makes things more complicated,” explained Ziad who is open to equity investment.
Launched in December 2015, Ethmar is offering Murabahah and Istisnah, among other products, to microentrepreneurs and low-income individuals. It has also recently launched an Islamic revolving financing solution for microbusiness owners seeking to cover their working capital needs.
Trying to tap all economic segments of Jordan, including commercial, service and agriculture sectors, Ethmar focuses on youth and start-ups. It has two branches, one in Amman and the other one in Irbid, in the north of the country near the Syrian and Israeli borders.