Link Program: Evidence from Micro-finance Institution in Jordan

  • Bashar Al-Zu’bi Arab Open University, Jordan
DOI: https://doi.org/10.22610/jsds.v8i4.2058
Keywords: Entrepreneurship, MSEs, Microfinance, Graduation, criteria, Non-financial support

Abstract

This paper studies and assesses the methodology of the “Link Programâ€, i.e., a process which the owners of micro-enterprises can undergo to help them grow their micro-enterprises into small and medium sized concerns. We evaluated the impact on the performance of micro entrepreneurs as a function of financial and non-financial support provided by a microfinance bank – NMB. The paper established specific criteria for enterprises’ graduation, namely: completing 3 loan periods with outstanding credibility and dedication of repayment, continuous profit growth rate obtained as a result of activities (revenue) expansion, formalizing the enterprise by registering it with the government, and generating jobs for local candidates. The paper made use of a sample of 8,000clients who took business loans and had accessed non-financial support provided by the NMB during a period of six to eighteen months. We employed a standard data analysis against graduation criteria and found the “AS IS†non-financial services (counseling and networking) have affected the performance of a few micro and small enterprises; only 13.7% of NMB’s clients grew. Although many micro and small enterprises do not usually grow as would be expected, the result from Jordan is below the international practices which showed that 50% and 60% of modern MSE in Latin America and Asia grew from low entrepreneurs. It was therefore concluded that NMB should design and deliver a more comprehensive and innovative non-financial services (“TO BE†approach).  

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References

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Published
2018-02-24
How to Cite
Al-Zu’biB. (2018). Link Program: Evidence from Micro-finance Institution in Jordan. Journal of Social and Development Sciences, 8(4), 6-13. https://doi.org/10.22610/jsds.v8i4.2058
Issue
Vol 8 No 4 (2017)
Section
Research Paper

Copyright (c) 2018 Bashar Al-Zu’bi

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