Volume 9, Issue 5, October 2020, Page: 298-307
The Economic Impact of Credit Guarantees in Jordan
Reham Abu-baker, Department of Business Economics, School of Business, University of Jordan, Amman, Jordan
Mohammad Adeinat, Department of Business Economics, School of Business, University of Jordan, Amman, Jordan
Received: Jul. 30, 2020;       Accepted: Aug. 13, 2020;       Published: Aug. 25, 2020
DOI: 10.11648/j.ijber.20200905.11      View  49      Downloads  39
Credit guarantee schemes have become a popular instrument to increase access to credit for financially constrained firms, typically small and medium-sized enterprises (SMEs). This government intervention of using credit guarantees as techniques for increasing access to finance for certain borrowers is argued to be useful, but their success and sustainability depend on many factors. Since 1994, the Jordan loan guarantee corporation through its several programs aims to support SMEs and enable them to have access to finance at a reasonable cost. This paper provides an evaluation analysis and impact assessment of credit guarantee system in Jordan by focusing on the Jordanian loan guarantee corporation (JLGC) performance. It found a positive impact on the Jordanian economy, but more emphasis on the guarantee system is needed with cooperation between all parties of the banking system, Central bank, and JLGC to achieve policy goals. Also it examines the government's recent initiative in the National Program for Finance and Loan Guarantee to encounter Corona crisis and found that it enhances the positive impact on the economy. In addition, more deep assessments that consider financial sustainability and economic additionally will be fruitful, as well as an assessment of credit guarantees against alternative policy instruments.
SMEs, Credit Guarantees, Public Guarantees, SME Financing, Access to Finance, JLGC
To cite this article
Reham Abu-baker, Mohammad Adeinat, The Economic Impact of Credit Guarantees in Jordan, International Journal of Business and Economics Research. Vol. 9, No. 5, 2020, pp. 298-307. doi: 10.11648/j.ijber.20200905.11
Copyright © 2020 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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