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Executive Insights: Jordan Central Bank Governor Ziad Fariz
The governor of the Central Bank of Jordan talks with Global Finance.
Global Finance: How was 2020 for Jordan?
Ziad Fariz: Jordan’s economy, like most economies in the world, is projected to witness negative growth in 2020, which would make it the first time to happen in 30 years. We are expecting GDP to record a 5% contraction, compared to a pre-crisis growth forecast of 2.1%. At the same time, we are forecasting a rebound in 2021, driven by a lower energy bill, the resumption of macroeconomic and structural reforms and a gradual recovery in external demand. We also envisage a recovery in workers’ remittances and travel receipts.
GF: What was your response to the Covid-19 crisis?
Fariz: The pandemic resulted in exceptional challenges, with deep socioeconomic consequences. These challenges drew extraordinary response. The CBJ has undertaken a comprehensive set of measures of 2.5 billion Jordanian dinars ($3.53 billion), or 8% or GDP, aimed at supporting banks’ liquidity, enhancing economic activity and preserving jobs.
The CBJ measures allowed banks to postpone installments due and restructure loans to their clients without charging any extra commissions or delay interest, reducing regulatory reserve ratios to 5% from 7%, cutting interest rates on all monetary policy tools by 150 basis points and activating various tenors of repo repurchase agreements up to 12 months. Moreover, allowing banks to postpone dividend payment for fiscal year 2019 was aimed at strengthening their capital buffers.
The CBJ took an additional JOD1.2 billion of measures to support vital economic sectors, through improving lending conditions with the CBJ’s refinancing program. In particular, lowering lending rates to reach 1% for projects inside the Amman governorate and 0.5% for projects in other governorates; expanding the repayment period to 10 years, of which two years are a grace period; raising the financing ceiling for each projects to JOD3 million for all targeted sectors, while keeping the ceiling for both renewable energy and transportation sectors at JOD4 million; expanding the program’s coverage to allow financing of operating expenses including payrolls, in addition to working capital; and finally, including export financing among the objectives of the program.
Likewise, the CBJ has launched a new financing program amounting to JOD500 million during April 2020. The program is designed to finance the operating expenses and working capital of SMEs [small and medium-size enterprises] sector, including professionals and craftsmen. The program’s disbursements until the end of August 2020 were JOD430 million, of which 40% was directed to payrolls.
GF: What are the lessons learned from this crisis?
Fariz: The pandemic has changed our perception of many issues, including the importance of self-reliance, digitization of the economy and financial transactions, financial inclusion, the problem of the informal economy, as well as the importance of having appropriate margins to hedge and mitigate the impacts of unexpected shocks, whether for government or financial institutions.
The crisis has revealed potential economic opportunities where Jordan has a comparative advantage. Among these are information technology, food industries, logistics and consulting services and pharmaceutical industries. More focus can be placed on these sectors to support economic growth.
GF: Aside from Covid-19, what are the biggest challenges for the Jordanian economy?
Fariz: The geopolitical tensions continue to impact our economy, including the influx of Syrian refugees, the unstable flow of energy sources, and declining domestic exports and foreign direct investment inflows. The tensions have created considerable financial and economic burdens, leading to a slowdown in economic growth and job creation, which in turns pushed the unemployment rate up to 19.1% at the end of 2019. Instead of reverting to protectionist trade policies, the current situation requires greater international cooperation and coordinated monetary and financial policies.
GF: Where do you see opportunities for Jordanian banks?
Fariz: The banking sector in Jordan is sound and resilient, supported by strong financial indicators, including a high capital adequacy ratio, a comfortable level of liquidity and a low ratio of nonperforming loans.
In fact, the pandemic has revealed several opportunities, including the importance of the adopting wise, dynamic and conservative business models. We need to leverage technological innovation, accelerate digital transformation, activate electronic banking channels and expand our pool of targeted financial consumers to achieve financial inclusion, and thus contribute positively to economic growth and development.
MSMEDA, Banque Misr sign EGP 500m worth microfinance contract
Published 05 Oct,2020
The Micro, Small and Medium Enterprises Development Agency (MSMEDA) and Banque Misr have signed a microfinance contract of EGP 500m to support micro-projects across Egypt.
The contract was signed by Minister of Trade and Industry and MSMEDA Executive Director Nevine Gamea and Banque Misr Chairperson Mohamed El Etreby.
It comes as part of the World Bank agreement entitled “Stimulating Entrepreneurship to Create Jobs”.
Gamea said the contract comes in accordance with the Egyptian government’s directives that MSMEDA coordinates with various development partners to support micro-projects in Egypt.
It will support the Central Bank of Egypt (CBE) and Egyptian Federation for Microfinance initiative to expand the provision of funding to NGOs and micro companies. This aims to help them provide their financial services to the largest number of citizens.
Gamea pointed out that the agency’s activities and its various plans take into account the particular focus on women and youth to ensure they are economically empowered.
The percentage of projects allocated to women in this contract stands at about 30% of the total funding. About 10% is directed to women over the age of 35, and 30% to youth aged between 21-35 years old.
The minister indicated that EGP 50,000 will be granted per loan, and that about 33,000 micro-projects will be funded during the project’s implementation across the country.
She praised the cooperation in the microfinance field between MSMEDA and Banque Misr, which began in 2011. The total number of contracts that the two sides have signed currently stands at about EGP 1.3bn, through which 205,000 micro-projects received EGP 2.5bn through the bank’s branches.
Mohamed El Etreby said that Banque Misr attaches great importance to the small, medium, and micro enterprises sector, by providing all financial and non-financial services to meet the needs of this sector’s clients.
He explained that Banque Misr is one of the first banks that adhered to the requirements of CBE and reached 20% of the bank’s credit portfolio, with its positive impact on the national economy, indicating that this coincides with the directives of CBE and the state’s efforts to advance in this sector, to improve economic indicators, increase economic development rates, encourage local products, and reduce the import bill.
QIIB awarded prestigious Certificate on Information Security for 5th year in a row
For the fifth consecutive year, QIIB has been awarded the highest certificate in the protection of banking cards data also called the Payment Card Industry Data Security Standard v 3.2.1 (PCI-DSS), granted by SISA, a Forensic driven Cyber security specialist company headquartered in Bengaluru, India.
This certificate is of particular importance given the unusual circumstances that the world is facing this year and the increasing challenges in combating attempts to hack and avoid scams as well as the customers’ growing dependence on payments via bank cards.
On the occasion, QIIB Chief Executive Officer Dr. Abdulbasit Ahmad Al Shaibei said: “We are pleased to meet the exceptional standards in the protection of our customers’ data. QIIB invested heavily in cybersecurity and its various solutions. Being awarded the PCI-DSS certificate proves that we are on the right track. We will continue to focus greatly on this aspect, which is deemed crucial for our banking operations and our various banking channels.”
He said, “Interest in providing technological solutions is no longer a luxury, but rather an urgent need that must be met constantly, while adopting the highest security posture and take advantage of the achievements made in the field of cybersecurity to protect from hacking attempts and electronic crimes, which unfortunately are becoming increasingly complicated and are target various facilities and institutions. Thus, our response should be above par, so as to protect the data of our customers and the security of our transactions in accordance with the highest standards”.
Dr. Al Shaibei affirmed, “QIIB assures its customers that the security of all their data and transactions is at the top of our priorities, in line with the best global standards, so as to serve the interest of our customers, enhance mutual trust and provide a safe technological environment for the prosperity of the local business environment”.
QIIB CEO thanked SISA, the leader in information security and customer data protection, stressing that the bank will continue to work closely with the company in order to benefit from its expertise and solutions in the field of cybersecurity.
SISA CEO and Founder, Dharshan Shanthamurthy, said: “Congratulations to QIIB’s team on achieving PCI DSS certification. Maintaining such an exhaustive international benchmark is not a one-off activity but an ongoing process.”
QIIB was established in 1990 as the second Islamic bank in Qatar and is currently the third largest Islamic bank listed on the Qatar Stock Exchange in terms of assets and market value. The bank has several regional and international partnerships and was able to make a qualitative leap in the development of its technological structure and alternative channels, thus enhancing the banking services its provides to the next level.
This certificate is of particular importance given the unusual circumstances that the world is facing this year and the increasing challenges in combating attempts to hack and avoid scams as well as the customers’ growing dependence on payments via bank cards.
On the occasion, QIIB Chief Executive Officer Dr. Abdulbasit Ahmad Al Shaibei said: “We are pleased to meet the exceptional standards in the protection of our customers’ data. QIIB invested heavily in cybersecurity and its various solutions. Being awarded the PCI-DSS certificate proves that we are on the right track. We will continue to focus greatly on this aspect, which is deemed crucial for our banking operations and our various banking channels.”
He said, “Interest in providing technological solutions is no longer a luxury, but rather an urgent need that must be met constantly, while adopting the highest security posture and take advantage of the achievements made in the field of cybersecurity to protect from hacking attempts and electronic crimes, which unfortunately are becoming increasingly complicated and are target various facilities and institutions. Thus, our response should be above par, so as to protect the data of our customers and the security of our transactions in accordance with the highest standards”.
Dr. Al Shaibei affirmed, “QIIB assures its customers that the security of all their data and transactions is at the top of our priorities, in line with the best global standards, so as to serve the interest of our customers, enhance mutual trust and provide a safe technological environment for the prosperity of the local business environment”.
QIIB CEO thanked SISA, the leader in information security and customer data protection, stressing that the bank will continue to work closely with the company in order to benefit from its expertise and solutions in the field of cybersecurity.
SISA CEO and Founder, Dharshan Shanthamurthy, said: “Congratulations to QIIB’s team on achieving PCI DSS certification. Maintaining such an exhaustive international benchmark is not a one-off activity but an ongoing process.”
QIIB was established in 1990 as the second Islamic bank in Qatar and is currently the third largest Islamic bank listed on the Qatar Stock Exchange in terms of assets and market value. The bank has several regional and international partnerships and was able to make a qualitative leap in the development of its technological structure and alternative channels, thus enhancing the banking services its provides to the next level.
Mohammad Y Al-Hashel: Lives and livelihoods, a delicate balance
Speech by His Excellency Dr. Mohammad Y Al-Hashel, Governor of the Central Bank of Kuwait and Chairman of the Higher Steering Committee for Economic Stimulus, Kuwait, 4 June 2020.
Taken aback by a pandemic the world had not seen in seven decades, we are left with no choice
but to do our best to protect lives. Hurriedly and feverishly imposed measures, as extreme as
total lockdowns, brought about the worst global recession since the Great Depression of the early
20th century. Forecasts suggest a drop of 3-5% in gross domestic product, while growth in Europe
is forecast to go down 8-12%. With unemployment hitting unprecedented highs, 1.6 billion
workers are negatively impacted by the pandemic. The International Labor Organization expects
a loss of around 305 million full-time jobs in the second quarter of 2020, and estimates that one
of six young people is now out of the job market as a result of the pandemic. And as companies
continue to suffer, more are going out of business and this phenomenon would blow up even
further. The Organization expects that the “Lockdown Generation” would face even higher
unemployment and lower pay for the next five years. These factors combined lead to uncertainty
regarding the true extent and severity of the crisis, causing fear and panic among consumers,
investors, and the business sector as a whole, intensifying further the economic and social impact
of the pandemic.
Suez Canal Bank to launch EGP 250 mn money market fund this month
Suez Canal bank to launch EGP 250 mn money market fund this month: The Suez Canal Bank will this month launch its first money market fund, Suez Daily, with EGP 250 mn in capital, the local press reports. The fund will offer daily subscriptions in short and medium-term financial instruments including bonds, treasury bills, bank deposits, and savings certificates, Chairman and Managing Director Hussein Rifai said.
CI Capital Asset Management, CI Capital Holding’s subsidiary, will manage the fund.
KIB awarded ‘Fastest Growing Islamic Bank MENA’ 2019
This achievement underlines the merit of KIB’s new strategic direction; a key component for its remarkable growth and expansion in the banking sector
In recognition of its remarkable growth in the banking sector, Kuwait International Bank (KIB) was awarded ‘Fastest Growing Islamic Bank MENA’ 2019 for a fourth consecutive year by Capital Finance International (CFI.co); an organization specializing in the finance and banking sectors.
This achievement underlines the merit of KIB’s new strategic direction; a key component for its remarkable growth and expansion in the banking sector. Evaluated by an independent judging panel composed of specialized editors, the Bank was assessed against several key criteria, namely: financial performance, risk management, corporate governance, customer service, innovation, corporate social responsibility, market leadership, transparency, response to market demands, and number of votes.
On this occasion, Vice Chairman and Chief Executive Officer of KIB, –Raed Jawad Bukhamseen congratulated all KIB staff for winning this prestigious award, saying: “This award bears testament to KIB’s commitment to excellence, leveraging the latest technologies to better serve its clients and taking on an active role in the regional economy. We continue to deliver products and services that push boundaries in a highly-competitive market, reflecting our growing strength and leading role in the local financial landscape.”
Bukhamseen pointed out that KIB has collected the ‘Fastest Growing Islamic Bank MENA’ award for a fourth consecutive year. As a repeat winner in CFI.co award programs, the judges have witnessed KIB’s impressive performance trajectory over the years. In 2018, the Bank was included in the Premier Market segment of Boursa Kuwait, further boosting its investor profile at the regional and international levels. In 2019, KIB issued a $300 million AT1 perpetual Sukuk to fuel its local expansion plans and enhance its capital base.
CFI.co is an international, independent assessment body specializing in finance and banking. A prominent, London-based organization, CFI.co combines views from leading multilateral and national organizations with thought leadership from some of the world’s top minds to bring you news, analysis and commentary on markets worldwide. The organization also recognizes both individuals and institutions that demonstrate high standards of innovation and performance excellence in the global financial market.
About KIB:
Kuwait International Bank (KIB) is a bank that operates according to the Islamic Shari’ah, based in the State of Kuwait. Incorporated in 1973, and originally known as Kuwait Real Estate Bank, KIB made the transition to its current Islamic operating model in 2007.
KIB is a full service Bank operating through a network of branches spread across the State of Kuwait, and offering a broad range of banking products, services and solutions in accordance with the principles of the Islamic Shari’ah. The Bank’s mission and vision also encompasses a leading social responsibility program that aims at supporting every member of Kuwait’s society by spearheading a multitude of initiatives and activities.
In 2015, KIB embarked on a comprehensive strategic plan, aimed at improving the Bank’s performance indicators, as well as enhancing the quality of its products and services. The strategy focuses on propelling the Bank to the forefront of the Kuwaiti banking sector and setting it on a solid path to becoming the “Islamic Bank of Choice” in the market.
Today, KIB is in the midst of its new strategic transformation: a comprehensive and long-term program which is aimed at transforming the way KIB engages with customers across every touch point and communication channel. This new strategy focuses on offering a next-level customer experience that delivers much more than just “banking” in the traditional sense – but rather establishes KIB as a partner in every aspect of its customers’ lives; a true “Bank for Life”.