Providing financing services for low income individuals and/ or individuals who do not have access to financial services from the banking sector, a process which is usually done through the microfinance sector, is considered to play a vital role in achieving financial inclusion, and thus human and economic development. The funding process to these categories contributes in achieving economic and social security by converting them to income generators rather than financial aid recipients.
Having a supervisory umbrella for microfinance sector became a necessity to enhance and develop its vital role and achieve its sustainability. This comes as an implementation of national strategy for microfinance in Jordan, which has been approved by the prime ministry, and has as one of its main cores the development of a unified regulatory and supervisory framework of the microfinance sector.
To achieve this the CBJ has taken a strategic decision to expand its supervision umbrella to include the microfinance sector, and many steps had been taken in this regard, the most important of which is approving the "Microfinance Companies bylaw" no. (5) of 2015 by the cabinet on 14/12/2014 that entered into force on 1/6/2015. Generally, the Bylaw aims at setting the legislation framework which includes high standards of professional practices regulating the Microfinance sector in the Kingdom, protection of the sector’s clients, achieving sustainability, and ensuring sound corporate governance, that guarantees the presence of efficient administrations with the necessary expertise. Thus, the Microfinance Institutions and Credit Bureaus Supervision Department has been created and it carries out the following tasks:
- Studying microfinance companies licensing applications.
- Off- site and On- site supervision to ensure the verification of the safety of financial positions of the sector within the laws, regulations, and instructions in force, as well as the international standards in this regard.
- Studying and analyzing the data and reports from the sector.
Inspecting the business of these companies and preparing the related reports