Economics of Microfinance and SMEs in Jordan: An Epirical Field Study

This book fills a gap in the field of microfinance in Jordan. It presents the status of the microfinance sector, analyzes the role of the banking system in the microcredit market, examines the conformity between Islamic banking and provision of microfinance, investigates the socio-economic determinants of the borrowing process and the determinants of credit rationing in loan markets. This book points out that the banking sector plays a modest role in the microfinance market; religious beliefs negatively affect micro entrepreneurs' involvement in credit markets; there is no identifiable conflict between provision of microfinance and the Islamic financing rules; Islamic microfinance institutions do not really exist in Jordan. Moreover, the socio-economic variables were found to affect lenders' and borrowers' behaviours.Credit rationing was found to be problems for some borrowers, but not for the majority. Finally, no discrimination against a subgroup of borrowers was identified.