Jordan, although a small, resource-scarce country in the Middle East, has demonstrated considerable resilience and ingenuity in fostering its Small and Medium-sized Enterprises (SMEs). The SME sector in Jordan is not just a backbone of the economy but also a beacon of entrepreneurial spirit and innovation. Despite numerous challenges, Jordanian SMEs have also seen notable successes that can provide inspiration to entrepreneurs worldwide.
Current Landscape of Jordan’s SME Sector
Jordan’s SME sector constitutes a significant portion of the national economy. SMEs in Jordan account for around 95% of enterprises, generate 50% of the jobs, and contribute about 40% of the GDP. The sector spans various industries including information and communication technology (ICT), tourism, trade, manufacturing, and services.
Jordan’s strategic location, educated workforce, and relatively stable political environment create a conducive atmosphere for entrepreneurial activities. The capital city, Amman, is a bustling hub of innovation and business activity, reflecting the dynamic nature of Jordan’s SME ecosystem.
Challenges Facing Jordanian SMEs
Despite their importance, Jordanian SMEs face several daunting challenges:
1. **Access to Finance**: One of the major hurdles for SMEs in Jordan is limited access to finance. Traditional banks are often reluctant to extend loans to small businesses due to perceived high risks and limited collateral.
2. **Regulatory Environment**: Complex and sometimes opaque regulatory frameworks can be a significant barrier. The process of starting a business, securing permits, and ongoing compliance can be cumbersome and time-consuming.
3. **Market Competition**: SMEs in Jordan often struggle with fierce competition, both from larger domestic firms and imported goods. The relatively small size of the domestic market can also limit growth opportunities.
4. **Infrastructure and Logistics**: While Jordan has made improvements, deficiencies in infrastructure, particularly in transportation and logistics, pose significant challenges for SME operations and expansion.
5. **Skill Gaps**: The labor market in Jordan experiences a mismatch between the skills available and the skills required by SMEs, particularly in high-tech and specialized industries.
Success Stories in Jordan’s SME Sector
Amidst these challenges, there are numerous success stories that showcase the potential and resilience of Jordanian SMEs:
1. **Jamalon**: Founded by Ala’ Alsallal, Jamalon is now the largest online bookstore in the Middle East, offering over 10 million titles in Arabic and English. This SME success story highlights the potential of e-commerce as a means to overcome market size limitations.
2. **Kharabeesh**: Initially a simple YouTube channel, Kharabeesh has grown into a leading Arab digital media and entertainment company. It produces Arabic-language content aimed at a broad audience, demonstrating the power of digital media and creativity.
3. **Altibbi**: Started by Jalil Allam and now managed by Mahmoud Al Hourani, Altibbi is the first Arabic-language medical knowledge platform. It provides valuable health information and telemedicine services, addressing significant healthcare gaps in Arabic-speaking communities.
4. **Café Younes**: This family-owned business began as a small coffee roastery in Amman but has since grown into a chain of popular coffee shops across the region. Their success lies in blending local tradition with global coffee culture.
5. **Pharma International**: A leading player in the pharmaceutical sector, Pharma International has expanded its operations well beyond Jordanian borders. It represents the potential for high-tech and science-based SMEs to thrive and reach international markets.
Conclusion
The SME sector in Jordan is a testament to the entrepreneurial drive and innovative capabilities of its people. While challenges like access to finance and regulatory hurdles persist, the success stories of Jamalon, Kharabeesh, Altibbi, Café Younes, and Pharma International serve as powerful examples of what can be achieved through determination and creativity. For Jordan to fully realize the potential of its SMEs, continued support from both the government and private sector, along with ongoing reforms, will be crucial in fostering a more conducive environment for these enterprises to flourish.
Here are some suggested related links about Jordan’s SME Sector: Challenges and Success Stories:
World Economic Forum
World Bank
United Nations Development Programme (UNDP)
Jordan Government
OECD
USAID
Institute of International Education (IIE)
European Union (EU)
European Investment Bank (EIB)
Asian Development Bank (ADB)
SME Finance Forum