Senate urges gov’t action against financing companies not aligned with 2015 bylaw

AMMAN — The Senate on Thursday called on the government to take action against 107 financing companies not aligned with the 2015 microfinance institutions (MFIs) bylaw.

During a session over a law abolishing the National Microfinance Bank, the Upper Chamber’s recommendations highlighted the importance of introducing, in coordination with the Central Bank of Jordan (CBJ), a ceiling for interest rate and commission charged by the MFIs.

The senators approved the law abolishing the National Microfinance Bank as referred from the Lower House, which entailed abolishing the bank and maintaining the operations of the private corporate, under the umbrella of the CBJ, according to the Jordan News Agency, Petra. 

The senators also recommended not distributing the bank's accumulated   profits of JD43.6 million, to be deposited in a special account to be dedicated to offering soft loans for the needy or to pay back the obligations of indebted women.

Last month, the company had addressed the government to capitalise its profits, which is against the bank’s law and does not allow the distribution of corporate profits to shareholders, according to the Senate's decision. This made it clear that the profits were generated as a result of exemptions enjoyed by the bank in accordance with the law.

The National Microfinance Bank was established in 2003 through a partnership agreement between the King Abdullah II Fund for Development (KAFD) and the Arab Gulf Programme for United Nations Development Organisations, along with private shareholders. The bank was registered with the Ministry of Industry and Trade as a private shareholding company.