Link Program: Evidence from Micro-finance Institution in Jordan

Bashar Al-Zu’bi

Journal of Social and Development Sciences, 2018, vol. 8, issue 4, 6-13

Abstract: This paper studies and assesses the methodology of the “Link Programâ€, i.e., a process which the owners of micro-enterprises can undergo to help them grow their micro-enterprises into small and medium sized concerns. We evaluated the impact on the performance of micro entrepreneurs as a function of financial and non-financial support provided by a microfinance bank – NMB. The paper established specific criteria for enterprises’ graduation, namely: completing 3 loan periods with outstanding credibility and dedication of repayment, continuous profit growth rate obtained as a result of activities (revenue) expansion, formalizing the enterprise by registering it with the government, and generating jobs for local candidates. The paper made use of a sample of 8,000clients who took business loans and had accessed non-financial support provided by the NMB during a period of six to eighteen months. We employed a standard data analysis against graduation criteria and found the “AS IS†non-financial services (counseling and networking) have affected the performance of a few micro and small enterprises; only 13.7% of NMB’s clients grew. Although many micro and small enterprises do not usually grow as would be expected, the result from Jordan is below the international practices which showed that 50% and 60% of modern MSE in Latin America and Asia grew from low entrepreneurs. It was therefore concluded that NMB should design and deliver a more comprehensive and innovative non-financial services (“TO BE†approach).

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:rnd:arjsds:v:8:y:2018:i:4:p:6-13

DOI: 10.22610/jsds.v8i4.2058

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