Supporting the Financial Institutions Green Transition

Micro, small and medium-sized enterprises (MSMEs) constitute the overwhelming majority of economic activity in Jordan. MSMEs account for over 99% of all enterprises, employ around 60% of the formal private-sector workforce, and contribute 40% of Jordan Gross Domestic Product (GDP), making them crucial for economic growth, resilience, and job creation. Despite this importance, MSMEs still face obstacles in accessing appropriate and diversified financial products. Access to formal credit remains limited for many MSMEs. According to the Central Bank of Jordan (CBJ) National Financial Inclusion Strategy (NFIS) 2023-2028, only 28.3% of formal MSMEs had a loan or line of credit from a financial institution, highlighting a significant financing gap for smaller firms in Jordan. Financial exclusion is especially pronounced for underserved segments such as informal and women-led enterprises, which often face higher collateral requirements, limited credit histories, and lower formal borrowing rates. Financial inclusion, defined as access to and use of appropriate, affordable, and sustainable financial products and services, remains a priority in Jordan. The CBJ is pursuing ambitious targets to increase overall financial inclusion, reduce gender gaps, and enhance MSME access to finance, including through digital channels and tailored products. The NFIS aims, for example, to increase MSMEs access to formal lending at an average annual rate of 4% for four years. In a similar vein, Jordan"s Green Finance Strategy 2023-2028 aims to mobilize green investments and position the financial sector as a regional leader in sustainable finance. The strategy highlights that a 92.5% of the Jordan National Determined Contribution (NDC) target cost is to be financed by international support and mobilized private capital. As Jordan advances its Green Finance Strategy, a central priority was establishing clear and credible standards for what qualifies as "green" across the financial system. The Jordan National Green Taxonomy, published in February 2026, provides this clarity by offering a common language for the financial system to classify sustainable economic activities in a transparent and consistent way. By anchoring investment decisions to science-based criteria, the taxonomy helps ensure that future capital flows genuinely support Jordan"s low-carbon, climate-resilient transition. Against this backdrop, the Deutsche Gesellschaft für Internationale Zusammenarbeit GIZ-implemented project, Innovative Approaches for the Financial Inclusion of MSMEs in Jordan (I-FIN), takes a holistic, market-driven approach to strengthening inclusive green finance in the country. The project operates across the policy, institutional, and market levels, helping to improve the broader enabling environment, upgrade the technical and operational capacities of financial service providers, and ensure that enterprises can confidently access and benefit from green finance solutions. The overall objective of the project is to ensure that MSMEs in Jordan benefit from a more inclusive financial system that enables inclusive access to green finance and supports environmentally sustainable and resilient business growth, also with a focus on women-led enterprises.