Allmamlaka - The Central Bank of Jordan decided on Wednesday to take a package of precautionary measures aimed at containing the negative repercussions of the emerging Corona virus on the performance of the local economy.

According to a central statement, the measures are summarized by allowing banks to restructure the loans of individuals and companies, especially medium and small ones, that have been affected by the consequences of this virus.

Central Bank Governor Ziyad Fariz said on Wednesday to "The Kingdom" that the decisions announced by the bank "were taken since the beginning of the Corona crisis, under the continued developments and the need for quick measures to help the economic sector and people in this difficult stage."

Freez added that the decision to postpone the credit facilities installments granted to clients of the economic sectors affected by Corona, in addition to delaying the installments on individuals affected by Corona, was taken earlier in the beginning of the Corona crisis.

He pointed out that the postponement of the installments takes place without any additional benefits or commissions, and that the postponement is not considered among the non-performing facilities and does not entail delaying benefits.

Speaking about the measures taken by the Central, Freez said, the Central “pumped about one billion dinars by reducing the mandatory reserve on deposits with banks to 5% (...) and making repurchase agreements according to which 500 million dinars were pumped in addition to reducing costs on existing financing programs The Central ..

The Central said in its statement, that one of the incentive measures is to pump additional liquidity to the national economy at a value of 1050 million dinars through reducing mandatory cash reserves, reducing financing costs and increasing deadlines for existing and future facilities for economic sectors, including medium and small projects through the Central Bank’s program to finance and support economic sectors .

The central bank announced the support of the procedures of the Jordanian loan guarantee company by reducing the company's programs commissions and raising the insurance coverage percentage for the local sales guarantee program, as follows:

First : Postponing the credit facilities installments granted to clients of economic sectors affected by the effects of the spread of the Corona virus from companies and individuals:

. Allowing the banks to postpone the installments due on the affected companies, provided that this is not considered a restructuring of the facilities, and that it also does not affect the credit companies ’rating with Creve, provided that the banks do not charge commission or delay interest on these companies as a result.

. Allowing the banks to conduct scheduling of clients' debts to whom the concept of scheduling applies without cash payment and without delay interest.

. Deferring retail customers' installments including credit card payments, housing loans and personal loans without any commission or delay interest.

. The above procedures will be implemented until the end of the current year 2020.

Second : Pumping additional liquidity to banks in the amount of 1050 million dinars through:

. Reducing the compulsory reserve ratio on deposits with banks from 7% to 5%, which will provide additional liquidity to banks in the amount of 1050 million Jordanian dinars, which enables banks to reverse this procedure by reducing the interest rates they charge on facilities granted by them to all economic sectors, including individuals and companies And the central noted that this is the first time that the mandatory cash reserve has been reduced since 2009.

. Make repurchase agreements with banks of 500 million dinars, for up to a year, to provide financing needs for the public and private sectors.

Third : Reducing the costs of financing the Central Bank's program to finance and support the economic development sectors on existing and future facilities, as follows:

. Reducing the program's interest rates to 1% instead of 1.75% for projects inside the Capital Governorate and 0.5% instead of 1.0% for projects in the rest of the governorates.

. Banks should reduce interest at the same rate on existing loans as of its date.

. Increase the deadlines available for advances and all sectors targeted in the program within the capital and unify them with the rest of the provinces to become 10 years, including two years a grace period for whoever desires.

. Increasing the ceiling of advances for all sectors to 3 million dinars, while maintaining the ceiling for the renewable energy and transportation sectors at 4 million dinars.

. Including the export sector within the program (bearing in mind that the sectors currently covered are industry, tourism, agriculture, renewable energy, information technology, transportation, health, technical, technical and vocational education and engineering consulting).

Fourth : Reducing loan guarantee commissions and increasing the coverage of the local sales guarantee program:

. Decreasing the commission of guaranteeing the industrial financing program and services from 1.50% to 0.75% for all loans that will be granted from its date until the end of the current year 2020.

. Reducing the start-up loan guarantee commission from 1% to 0.75% for loans to be granted from its date to the end of the current year 2020.

. Increasing the insurance coverage percentage of the local sales guarantee program from 80% to 90%.

Fifth : Preparing a soft financing program to support small and medium-sized companies in the amount of 500 million dinars from the bank and by guaranteeing the Jordanian loan guarantee company:

The Loan Guarantee Program to Face the Corona Crisis aims to facilitate financing for professionals, craftsmen, owners of individual institutions and small and medium companies and enable them to obtain financing on favorable terms and costs to help these groups cover their financing needs for the purposes of financing operating expenses, working capital and fixed assets, to enable these economic sectors to maintain On its work and its employees and to continue its activities and provide its services during the conditions and procedures for containing the Corona virus and also enabling them to resume their activities at the natural levels and expand its business during the coming stages.

The most important features of the program:

. Low cost of loans does not exceed 3.5% ؜.
. Guarantee level of 85% ؜ compared to 70% for regular programs.
. Grace period of one year.

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