SANAD launches innovative digitalization program to boost COVID-19 crisis response
Jordan Trade Facilities Company receives support to implement digital solutions that contribute to promoting MSME finance
Frankfurt, June 1, 2021 – In the first milestone of its innovative new digitalization program to mitigate the impact of the COVID-19-induced crisis, the Technical Assistance Facility of the SANAD Fund for MSME (SANAD TAF) has provided the fund’s partner Jordan Trade Facilities Company (JoTF) with a loan and financial support to drive the institution’s digital transformation.
JoTF is a strategic partner of the SANAD Fund for MSME in the fund’s efforts to promote entrepreneurship in the Middle East and North Africa by channeling targeted financing to the region’s entrepreneurs. Since 2018, loans provided to the institution by SANAD have facilitated the provision of nearly USD 5 million in financing to micro, small, and medium enterprises. With the onset of the coronavirus crisis, a slowdown in business activity posed both operational and financial challenges to these entrepreneurs as well as to the financial institutions that they rely on. Online tools and digital infrastructure proved invaluable in keeping processes running. In response to these developments, not only did the fund unleash new financing to help local financial infrastructure cope with liquidity bottlenecks, the SANAD TAF also launched a unique program to support financial service providers and local businesses in ramping up their tech tools and infrastructure.
Now, the SANAD TAF has extended its initial financial support project for this purpose. The assistance, which accompanies a recent local currency loan supplied to JoTF for on-lending to local businesses, will accelerate JoTF’s efforts to transfer some of its processes to an online platform. This will increase efficiency and capacities, thus enhancing the institution’s ability to flexibly respond to client needs and thus better serve micro, small, and medium enterprises, despite the ongoing pandemic-related restrictions.
Kim Reichel, Member of the SANAD TAF, said: “SANAD has always emphasized the importance of digital tools in expanding access to finance for underserved groups. Yet the key role played by tech in supporting resilient, agile crisis response became indisputably clear as business went online last year. Now, by supplementing the fund’s financial activities with the resources to implement digital solutions, the SANAD TAF aims to help ‘future-proof’ the operations of institutions and entrepreneurs alike.”
The SANAD TAF’s grant program includes three types of support: support provided directly to micro, small, and medium enterprises to bolster their digital infrastructure; support for the digitalization efforts of the fund’s partner institutions; and credit risk insurance cost-sharing to help strengthen these institutions’ lending portfolio to entrepreneurs.
Click here to learn more about the program.
The SANAD Fund for MSME finances micro, small, and medium enterprises and low-income households in the Middle East and North Africa and selected countries in sub-Saharan Africa via qualified local lenders. SANAD thereby fosters economic development and job creation – including youth employment – agriculture, affordable housing, and innovations in finance and financial technologies. SANAD strives to meet these goals by providing debt and equity financing to its local partners. The SANAD Technical Assistance Facility multiplies the fund’s development impact and outreach through capacity-building with partner institutions, developing financial infrastructures according to the principles of responsible finance and conducting much required R&D.
An impact investment fund advised by Finance in Motion, SANAD’s investors include the KfW Development Bank, which initiated the fund; the German Federal Ministry for Economic Cooperation and Development (BMZ); the European Union; Switzerland’s State Secretariat for Economic Affairs (SECO); OeEB, the Development Bank of Austria; Germany’s GLS Bank and GLS Treuhand; the Dutch development bank FMO; and Calvert Impact Capital.
For more information on the SANAD Fund for MSME, please visit: www.sanad.lu
For more information on Finance in Motion, please visit: www.finance-in-motion.com
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