Date of Submission to Coordination Unit:
April 17, 2013
A. GENERAL INFORMATION
1. Activity Name
Jordan's SME Growth Programme 2013-2015
2. Requestor Information
Name:Ministry of Planning & International Cooperation
Title:Minister
Organization and Address:Ministry of Planning & International Cooperation, P.O.Box 555 Amman 11118 Jordan
Telephone:+962 6 4644466/ 4649023
Email:[email protected]
3. Recipient Entity
Name:Jordan Enterprise Development Corporation JEDCO
Title:Eng. Yarub Qudah -Chief Executive Officer
Organization and Address:Jordan Enterprise Development Corporation – P.O. Box 7704 Amman 11118 Jordan
Telephone:+ 962 6 5603507 Ext. 2062/2041
Email:[email protected]
4. ISASC Representative
Name:Julien SERRE
Title: FEMIP Trust Fund Manager
Organization and Address: European Investment Bank
100 Boulevard Konrad Adenauer Luxembourg L 2950
Telephone: +52 621 339 175
Email: [email protected]
5. Type of Execution (check the applicable box)
√
1.
√
Type
Country-Execution
Endorsements
Attach written endorsement
from designated ISA
Justification
Joint Country/ISA-Execution
Attach written endorsement
from designated ISA
Jordan/ JEDCO (the nationally mandated
entrepreneurship, Startups and SME support
institution) and EIB will build on their strong
relationship of working jointly on promoting the
development of SMEs. Given the expertise of EIB
in the activities foreseen as well as EIB
participation along other IFIs and private
investors in SME dedicated funds for the MENA
region, and expecting that growth SMEs
benefitting from the Programme could receive
investments from the existing or future
investment funds to be supported by EIB along
other investors, Jordan/JEDCO has decided that
joint country and ISA execution was required
with EIB.
EIB will be supporting Component 5 of the
programme by ensuring the monitoring of a
substantial deal flow to the existing SME funds
for the MENA region (including the ones in
which EIB participates).
ISA-Execution for Country
ISA-Execution for
Parliaments
Attach written endorsement
from designated ISA
Attach written endorsements
from designated Ministry and
ISA
(Provide justification for ISA-Execution)
6. Geographic Focus
x
Individual country (name of country):Jordan
Regional or multiple countries (list countries):NA
7. Amount Requested (USD)
Amount Requested for direct Project Activities:
(of which Amount Requested for direct ISA-Executed Project Activities):
Amount Requested for ISA Indirect Costs: 1
Total Amount Requested:
USD 3,650,000
(USD 190,000)
USD 200,000
USD 3,850,000
8. Expected Project Start, Closing and Final Disbursement Dates
Start Date:
September 16,
2013
Closing
Date:
September 15,
2015
End Disbursement
Date:
December 30,
2015
9. Pillar(s) to which Activity Responds
Pillar
Investing in Sustainable Growth.
This could include such topics as
innovation and technology policy,
enhancing the business environment
(including for small and medium-sized
enterprises as well as for local and foreign
investment
promotion), competition
policy, private sector development
strategies, access to finance, addressing
urban congestion and energy intensity.
Inclusive Development and Job
Creation. This could include support of
policies for integrating lagging regions,
skills and labor market policies, increasing
youth employability, enhancing female
labor force participation, integrating
people with disabilities, vocational
training, pension reform, improving job
conditions and regulations, financial
inclusion, promoting equitable fiscal
policies and social safety net reform.
1
Primary
(One only)
Secondary
(All that apply)
Pillar
Enhancing Economic Governance.
√
This could include areas such as
transparency,
anti-corruption
and
accountability policies, asset recovery,
public
financial
management
and
oversight, public sector audit and
evaluation, integrity, procurement reform,
regulatory quality and administrative
simplification, investor and consumer
protection, access to economic data and
information,
management
of
environmental and social impacts,
capacity building for local government and
decentralization, support for the Open
Government Partnership, creation of new
and innovative government agencies
related to new transitional reforms,
reform of public service delivery in the
social and infrastructure sectors, and
sound banking systems.
x
Competitiveness and Integration.
This could include such topics as logistics,
behind-the-border
regulatory
convergence,
trade
strategy
and
negotiations, planning and facilitation of
cross-border
infrastructure,
and
promoting and facilitating infrastructure
projects, particularly in the areas of urban
infrastructure, transport, trade facilitation
and private sector development.
Primary
(One only)
Secondary
(All that apply)
x
x
ISA indirect costs are for grant preparation, administration, management (implementation support/supervision) including
staff time, travel, consultant costs, etc.
B. STRATEGIC CONTEXT
10. Country and Sector Issues
Achieving sustained growth and reducing unemployment and poverty are the main development challenges in Jordan.
Innovation support, entrepreneurship, start-ups and small and medium enterprises (SMEs) development are seen as
critical players in addressing these national challenges and do contribute towards its sustainable solution.
Role of MSME’s in Jordan Economy
Micro, small and medium enterprises (MSMEs) today are positioned as the backbone and vanguard of the modern
enterprise sector in Jordan. The 2011 General Economic Establishments Census revealed that MSMEs represent 98%
of Jordanian enterprises, 66% of which have less than 19 employees; employ 70% of the total labor force employed by
the private sector; produce outputs that contribute 40% towards national GDP, and account for 45% of total exports.
The total number of operating enterprises is 165,879, of which 135 are non-Jordanian owned, 45.8% are located in
Amman, 16.7% in Irbid and 14.8% in Zarqa (main economically active Governorates in Jordan). In terms of company
legal form, the number of individuals - owned (sole proprietorship) enterprises is 135,904 making up 86.7% of the
total number of enterprises, followed by the joint-liability establishment at 8.9%. The percentage of enterprises
employing less than 5 workers is 91.5% of the total number of enterprises, while enterprises that employ more than
20 workers accounted for 1.9%. Enterprises with an income of less than JD 5,000 accounted for 35.2% of the total
number of enterprises, while those with an income more than JD 500,000 constituted 1.4%. This reveals that Jordan
continues to have a dearth of enterprises with over 50 employees, making it a nation of very small enterprises.
MSMEs present the propelling force of economic modernization and growth at large and are an important sector that
needs to continue being adequately factored into policy making and programme implementation in every national
private sector development policy. The growth potential of the sector and its critical role in all productive sectors,
distribution and value chains can only be underscored. The development of MSMEs is increasingly recognized as
important to the economic, social and human development of Jordan and a clear priority of the government.
Supporting MSMEs is identified in the National Agenda 2006-2015 as one of the elements of a holistic approach to
stimulate economic development and improve social welfare and security.The Executive Development Plan 20112013 states “empowering and building the capacity of MSMEs” and “stimulating new start-ups” as short-term
objectives for enhancing the competitiveness of the national economy, noting that the challenge is to increase
investments in high-valued sectors in order to create more job opportunities. The Plan set targets for increasing the
share of MSMEs in gross domestic product (GDP) to 40% by 2013, from a baseline of 30% of GDP in 2009 (in line with
the stated aim in the National Agenda 2006-2015 to increase the MSME share of GDP to 47% by 2017); and for
increasing the ratio of the workforce employed in MSMEs to 76% by 2013, from a baseline of 70% in 2009.The 2011
General Economic Establishments Census revealed that MSMEs have reached the 40% target contribution to GDP
before 2013 and efforts are now focused on achieving the targeted 47% contribution sought by 2017.
Although MSMEs are not deliberately proclaimed and used by the Government (until recently) as a direct tool to
contribute towards poverty reduction; their role as a medium for employment creation and creating a source of
income had always been acknowledged. MSME development is a tool for alleviating some of the economic and social
disparities between the various regions of Jordan. The government’s goal is to reduce development discrepancies
between governorates and municipalities by increasing the available financing opportunities for micro and small
enterprises, especially in the poorest regions, and encouraging the private sector and non-governmental
organisations (NGOs) to set up development and productive investment projects that will increase employment
opportunities for women and the unemployed, expanding the number of Development Zones to 10 by 2013,
channelling more funds through the Agricultural Credit Corporation and implementing the Governorates
Development Fund are among strategic actions.
Jordan is also facing other critical demands in terms of improving the productivity and competitiveness of its MSMEs
to compete in international markets through innovation, upgrading, modernisation, and accelerating investment and
economic growth. Actions are needed to address weaknesses in the institutional and business environment
framework, the position of Jordanian products in world markets, and the basic infrastructure which supports
industrial, technological, touristic and agricultural investments.
Macro and micro level actions are needed to strengthen the MSME sector. Macro level requires political and
macroeconomic stability, clear and transparent regulations, secure property rights, rule of law, andstable and wellfunctioning financial markets. Micro level actions include MSME development agencies and programmes in parallel
with efforts to improve the policy, legal and regulatory environment in which MSMEs operate.
To address the multiplicity and interaction of factors that underpins the growth and competitiveness of MSMEs, a
more coherent, holistic and integrated approach to their development is currently being undertaken by the
Government and will be reflected in the National Entrepreneurship and MSME Development Strategy (2013-2017).
The Strategy will seek to address challenges resultant from the impact of globalisation of production and opening of
domestic markets, as they can have an adverse effect on the structure of the MSME sector, with MSMEs losing ground
in terms of competitiveness and leading to a predominance of micro-scale and necessity-driven, “survivalist
enterprises” in the structure of the economy. To a great extent, this has been happening in Jordan.
The Current Status of the MSME Sector
The first major observation is that the density of MSMEs (25.6 per 1,000 inhabitants) in Jordan is low compared to the
global average and for a country at Jordan’s level of economic development.
Secondly, an analysis of MSME sector trends reveals very slow growth in the net stock of non-agricultural enterprises
over the past five years – an annual average increase of only 1.3% from 2006 to 2011. Net growth in the number of
enterprises is the end product of a dynamic that reflects the entry of new businesses (start-ups) and the survival rates
of new and existing businesses. Unfortunately, due to the lack of relevant statistical data on this dynamic in Jordan, it
is not possible to assess the underlying factors in the slow growth rate in the stock of enterprises. However, it is noted
that the net growth in number of enterprises was lowest for those with 1-4 employees (annual average of just over
1%). On the other hand, the net stock of enterprises with 10-19 employees, 20-49 employees and more than 100
workers has increased by an average of about 4% a year in each of the size categories. This could indicate a slower
rate of new business start-ups (since it might be assumed that start-ups generally fall in the 1-4 employee enterprise
category) and/or the movement of enterprises from one size class to another. Furthermore, growth in the net stock of
enterprises slowed considerably in the second half of the decade, compared to the 2000-2005 period, a trend that
would be threatening to Jordan’s future growth if it was to continue.
Thirdly, employment in non-agricultural private enterprises grew by an annual average of 2% from 2005 to 2010,
again at a much slower growth than during the 2000-2005 period (annual average of 6.5%). This is also a trend of
concern. The share of employment in enterprises with 100 or more employees has been increasing while the share of
employment from enterprises with fewer than 50 employees has been shrinking. However, the end result is that the
average firm size has increased from 3.9 employees in 2000 to 4.6 employees in 2010.
Fourthly, over the 2000-2011 period, the number of self-employed persons increased by an annual average of 1.3%,
again at a very slow rate. Overall, self-employment rates have dropped from 17.1% of employment in 2000 to 15.2%
in 2011 and the actual number of self-employed persons has been on the decline since 2009. This suggests that selfemployment is growing at a slower pace than that of overall employment. Women make up less than 5% of selfemployed persons, which is exceedingly low compared to their participation in self-employment activity in other
countries. However, over the past ten years, although their numbers are very small, Jordanian women have been
becoming self-employed at more than three times the rate of men, suggesting that self-employment is becoming a
more attractive employment option for Jordanian women.
Fifthly, the prevalence rate of early-stage entrepreneurs in the adult population (percentage of adults in the process of
trying to start a business combined with the percentage of adults who own a young business of no more than 42
months old) is lower than might be theoretically expected for a country at its level of development. This suggests
room for boosting entrepreneurship promotion efforts.
Constraints to entrepreneurship and MSME development
Although MSMEs are dominant in Jordan, their small size distribution, particularly the dominance of enterprises with
fewer than five workers, places them at a disadvantage relative to large enterprises. They have fewer internal
resources and less capacity to innovate and compete in global markets. They suffer from a lack of management skills,
financing, and technology that limits their survival and growth potential. The majority of MSMEs focus on the
production of traditional, low value-added goods with mediocre quality, serving local markets, and competing on the
basis of price. Very few have the capacity to export and/or compete in international markets. The vast majority do not
have any quality control systems in place or follow quality control procedures that are in compliance with
international quality certification systems. They do not invest heavily in technologies that will add value to their
products and overall economic performance, and exhibit low levels of technology utilisation.
Apart from internal constraints, the ability of MSMEs to function effectively is also impacted by external factors. These
include the markets in which they operate (e.g. entry barriers, competition); policies, laws and regulations affecting
business activities, which do not sufficiently consider the impact on smaller enterprises in their development and
implementation; and the organisational and institutional arrangements surrounding the enterprise (e.g. business
support entities and services, financial mechanisms, etc.), with an uneven availability of these supports at the regional
level.
There are few empirical studies of Jordanian MSMEs, however, consultations with business and sector associations,
government officials and MSME support providers during the preparation phase to prepare the first National
Entrepreneurship and SME Development Strategy (2013-2017) reveal consensus on the major obstacles acting as
barriers to MSME development. These are:
 A weak entrepreneurial culture;
 Lack of financing;
 Lack of entrepreneurial and management skills and capacity, coupled with inadequate access to business
development, advisory and diagnostic support services, especially in the governorates;
 Market access;
 Lack of innovation and technology adoption/development; and
 Legal, regulatory and administrative challenges.
These barriers are magnified for new enterprises, which can have a deleterious effect on business start-up rates and
the survival and growth opportunities of new entrepreneurs. Women and young people starting businesses are even
more seriously impacted because of their lack of experience, management skills, participation in formal business
networks, and credibility. In addition, Jordanian stakeholders emphasized the high input costs (e.g. cost of energy);
the lack of appropriately skilled labor due to an education and training system that is not adequately preparing
graduates with “employability skills”; and the low commitment/investment of MSMEs in training their workers, all of
which reduce their productivity and competitiveness.
The Current Entrepreneurship and MSME Support Landscape
The entrepreneurship/MSME support system in Jordan is comprised of a number of government and nongovernmental organisations offering project-based programmes to address the financial and business support needs
of MSMEs. A large number of these organisations and programmes were put in place since 2000, with Jordan
Enterprise Development Corporation – JEDCO – established in 2003, being nationally mandated by the Government
through a law to spearhead and implement policies and actions to support the development of enterprises throughout
their lifecycle. Furthermore, there is a number of existing good support initiatives to promote and support
entrepreneurship and MSME development at various stages of the business cycle currently undertaken by JEDCO and
other entities in Jordan. These include entrepreneurship education and culture-building initiatives; start-up support;
training and counselling; consultancy and upgrading assistance; innovation support; export development assistance;
and financing support.
On the other hand, it appears that most programmes have limited reach in terms of beneficiaries and access in many
parts of Jordan. Access to support programmes is often through a competitive process and non-selected, but
promising applicants have few other avenues for professional guidance. There is no mechanism for coordinating the
range of service providers and programme efforts and the quality of services offered. This can result in sporadic and
geographically uneven support offerings, as well as hinder policy learning and the capacity to identify and fill gaps and
scale-up good initiatives. In addition, a number of the organisations delivering MSME support initiatives are
dependent on donor or other project-based funding, which affects the continuous, sustained delivery of their
programmes and services. Only a few organisations and/or programmes target the development of women
entrepreneurs.
Challenges faced by MSMEs in Jordan
Government-led studies and surveys have confirmed the above constraints and identified the following challenges as
limiting factors to the vibrant growth, competitiveness and productivity of MSMEs. It has been concluded that these
challenges are serious obstacles hindering the growth of enterprises from micro too small to medium, and finally to a
large scale enterprises. The Government is currently undertaking the necessary steps with the support of the private
sector and donor agencies to address the predominant challenges below, through the various relevant institutions,
with JEDCO taking a leadership role in implementation and facilitation of actions across the board to address the
identified constraints.
1. Lack of and difficulties in accessing capital and finance. Start-ups and MSMEs have an intrinsic inability to meet
collateral requirements of banks, are unable to access other forms of financing, in addition to their lack of knowledge
about how to properly prepare loan/financing requests, etc.). Microfinance is not consistently available in all parts of
Jordan, for example, some microfinance institutions operate with geographic criteria or only in poverty pockets where
the unemployment rates are highest; there are rigid guarantee requirements for bank loans, even if the loans are
guaranteed by the Jordan Loan Guarantee Corporation (JLGC); and forms of equity investment capital are underdeveloped.
2. Inadequate availability and access to updated market information and intelligence (e.g. information on market
opportunities, export markets, market competition, etc.) make finding export markets, understanding and meeting
regulatory and consumer requirements a further challenge.
3. The variance in product quality, high input costs (e.g. cost of energy); lack of diversification and innovation also
reduces the productivity of MSMEs and their competitiveness.
4. Difficulties in accessing technology and the lack of technology know-how within most Start-ups and MSMEs,
5. Lack of human capital management skills, including growth-enabling know-how (i.e. marketing, sales, financial and
HR management; product and process development, strategic planning); how to think innovatively, start and grow a
business are further drawbacks that contribute to Entrepreneurship and SMEs growth prospects in the economy.
6. Quality MSME diagnostic, innovation and business support services are limited, expensive and not readily available
or accessible to the private sector- and particularly those located or want to locate in the Governorates, hence nine out
of a total of twelve governorates are lagging behind, and need to be integrated into this proposed national MSME
growth programme in order to facilitate an equitable distribution of development and modernization across Jordan.
When present though, we witness a low awareness among MSMEs of the government and other support programmes
available.
7. The availability of innovative and skilled labor as the tertiary and vocational education system is not adequately
preparing graduates with ‘employability skills' and we witness a low commitment/investment of MSMEs in training
their workers.
8. Collaboration between MSMEs, Innovation and R&D service providers and Universities is negligible,
9. There are very weak to non-weak linkages between Start-ups, MSMEs and larger firms; hence value chains – if
existent - are very vulnerable and fragile.
10. Competent and certified consultants, specialized business coaches with sector and technology knowhow, mentors
and training and capacity building services in applied disciplines that MSMEs will need towards their business
growth.
In spite of efforts to improve MSMEs’ access to training, financing through microfinance, loan guarantees, government
grant and subsidy schemes to boost MSME activity, and the launch venture capital funds, the financial market for
MSMEs is severely underdeveloped. The unmet demand for microfinance is estimated at JD 150 million to JD 200
million, bank lending to MSMEs comprises less than 10% of the business loan portfolio, the volume of loan guarantees
to GDP is only 0.07% (below the benchmark in several other developing MENA countries), and new venture capital
funds are only sizeable enough to make a few investments, although a FEMIP study in 2007 identified the financing
gap for SMEs to be US$1.5 billion.
EIB is a key actor in support to Jordan’s SMEs through its lending, risk capital (e.g. Jordan Capital for Growth Fund,
Badia Impact Fund) and technical assistance. EIB attaches great importance to the development of SMEs, which can
contribute to mobilizing more dedicated resources for equity funds in the country and for global loans to local banks
supporting small and medium enterprises. EIB’s FEMIP has made the development of SMEs a priority, with 2,500
companies supported between 2001-2012. EIB is not directly involved in projects, but funds local banks, with 55% of
FEMIP funds going to the private sector, mostly SMEs. EIB has provided loans to Jordanian banks supporting SMEs
and envisages a guarantee scheme, reflecting the Bank’s confidence in the country’s capacity to grow successful
companies.
11. Alignment with Transition Fund Objective
The project fully aligns with the objectives of the Transition Fund and mainly with the primary pillar of
investing in sustainable growth, in addition to responding in a secondary manner to the other three
Transition Fund pillars: inclusive development and Job creation, Enhancing Economic Governance and
Competitiveness and Integration. It builds on the accumulated experience of JEDCO in the area of supporting the
upgrading, modernization and development of Entrepreneurship, Startups and SMEs by providing specialized and
focused technical assistance. It fulfills and is in line with the global and MENA region governments approach to
promote and enable innovation, invention, patents and copy-rights registrations and enforcements, IP
commercialization, and responds more directly to the ambitions and needs of both Government and society at large to
ensure inclusive growth and development by targeting populations of less developed regions and governorates in
Jordan, education and skills empowered women and youth.
The project provides technical assistance, specialized and/or advanced human capital training, capacity and capability
building to boost growth through future technology transfer and adoption, trade, and job creation. It is foreseen that
this programme will be directly linked with the existing and future new Funds in which the ISA participates (Jordan
Capital for Growth Fund and Badia Impact Fund)that will facilitate access to finance and provide options for financial
instruments such as equity and/or mezzanine capital that does not exist in Jordan.
This programme is positioned as a new generation programme that introduces a new paradigm for sophisticated
business support and growth provisions. It will further reinforce and enable JEDCO's high growth insight by
establishing a new Entrepreneurship, Startups and SME Growth Observatory, which will monitor and document
enterprise behavior, and policy related matters and impact, in addition to harnessing potential business
opportunities, linkages and market intelligence to provide meaningful insight into the wider targeting of JEDCO
activities, in addition to adding value and support to those of the Chambers of Industry, Commerce and business
association community in Jordan. This is an intelligent programme, analytically learning as it delivers to continuously
yield higher impact and value over time. It will provide and adapt methodologies and tools proven to deliver high
growth and a return on investment. It will aim at providing access to the largest and most experienced coaching pool
in Europe in order to develop capacity in the Jordanian business coaching community via targeted coaching and
"hand-holding" ensuring maximum value from each customer engagement. It includes a plan to establish relationships
with local accountants, lawyers, and investors to provide connectivity to the local private sector community. The
overall offering is a value proposition to clients that establishes the Jordan's SMEs Growth Programme as the premier
access point into the fastest growing companies in Jordan. This may also serve as an information base for Investment
Funds seeking credible business opportunities in Jordan.
Specific measures that will be undertaken by the project to achieve TF objectives and pillars:
The measures - illustrated by the components of action foreseen in this project - mainly anticipate responding to
Pillar 1: Investing in Sustainable Growth.
By introducing tailored training, advanced and quality business coaching and specialized business support services
that respond to specific entrepreneurs and MSME community needs in Jordan identified through the comprehensive
diagnostic stage of the project; an investment in the sustainable growth of these enterprises and hence their positive
impact on the economy will be achieved.
This will lead to an overall enhancement of the operational business environment (including that for local and foreign
investment promotion), and respond to private sector development strategies (also highlighted in the fourth pillar of
the Transition Fund Competitiveness and Integration).
The National Entrepreneurship and MSME Development Strategy (2013-2017) emphasizes the need for specialized
training services to be offered across Jordan in leadership, strategic management development and marketing, in
addition to facilitating access to finance, especially to implement the business growth plans that are developed by
these MSMEs as an outcome of these training activities. It is proposed that one of the tools to facilitate access to
finance may be through introducing and offering competitive grants to contribute towards the financing of the
implementation of these enterprises growth plans. These grants may leverage bank loans, in addition to enhancing the
attractiveness of the MSME to venture capital and investors in Jordan, the region and possibly the international
sphere. Priority topics that will be encouraged and addressed by the beneficiary MSME base of this project will be
related to productivity enhancement, innovation and technology needs, in addition to the provision of solutions that
address the energy challenges and costs they face and are affecting their competitiveness in the markets.
Furthermore this project will respond in a secondary manner to the other pillars of the Transition Fund particularly
Inclusive Development and Job Creation as entrepreneurs and MSMEs and human capital from lagging regions will
be targeted when soliciting beneficiaries for this project. It is anticipated that the training offered will develop skills
and increase youth and female employability, improving job conditions and maybe integrate people with disabilities if
they can function within the minimum requirements of these MSMEs.
Finally, Enhancing Economic Governance will also be achieved through establishing the MSME Observatory at
JEDCO, as it will facilitate and simplify access to economic data and information, publish reports, manage economic,
environmental and social impacts (where applicable), in addition to offering capacity building for the organization
and its staff in the areas of research and policy support, management of operations, developing the private
professional and business services sector, outreach and communication. The project implementation will be
transparent, with anti-corruption and accountability policies in place to ensure easy oversight, integrity, and will
contribute towards creation of new and innovative government agencies related to new transitional reforms, and
reform of public service delivery in the social and infrastructure sectors.
12. Alignment with Country’s National Strategy
This advanced support Programme is aligned to Jordan's National Strategy depicted in the National Agenda and its
updated version currently underway in addition to the evolving first National Entrepreneurship, Start-ups and SMEs
Development Strategy (2013-2017) currently being prepared by JEDCO to be raised for Cabinet approval and actionplan endorsement in the third quarter of 2013. It is part of the focused efforts aimed at developing MSMEs by
introducing and supporting their adoption of innovation, and the provision of an accelerated growth support facility
to promising Startups and MSMEs that have a demonstrated growth threshold for the last 3 years. It aims at building
capacity of the private sector professional business and service provider community in a manner consistent with the
outputs of the Services Sector Development Masterplan (2013-2017). These efforts are all in alignment with Jordan's
overall objective to pursue a knowledge-based economy, leveraging the country’s strong human capital base, creating
jobs and reducing the country’s substantial fiscal deficit.
Furthermore, this project aims at preparing MSMES to grow and innovate utilizing a competent and uniquely certified
Jordanian provider talent pool and with the connection to venture capital is an integrated approach that will certainly
support transforming the culture and advance the targeted MSME and fast growing audience. Jordan/JEDCO through
this project will also be investing in developing the national talent pool that will be empowered and positioned to be
an exporter of these specialized business support and development services in the region, hence further build the
Jordanian consultancy and professional services sector and help them grow their exports. This is aligned to the goals
and objectives of the Jordan Services Development Masterplan (SDMP) 2013-2017.
This project is proposed to be implemented by JEDCO, taking into account its national mandate to support the
establishment and development of enterprises throughout their life-cycle to become globally competitive, and to
become the Jordanian national organization most recognized for increasing enterprise exports and substituting
imports with equivalent or better local products and services.
The proposed project addresses JEDCO’s core values providing support for entrepreneurship and innovation,
capability and capacity building to SMEs to export and compete globally, sustain and create new jobs and facilitate the
value chains that will enhance Jordan's integration in the global market. These values will reinforce the basis for
sustainable business and economic growth equipping Jordan to advance into the new millennium. Since independent
research has shown that growth may occur in any sector, and that high growth is achieved uniformly across sectors
and business profiles, the project will focus on businesses which have the capacity to grow from any sector thereby
supporting the economy’s need to diversify its reliance on the service sector which accounts for 67% of gross domestic
product (GDP) and more than 70% of jobs. Having a diverse, robust and resilient economy will allow Jordan to be better
placed to deal with any future economic crisis.
With JEDCO's current successes in: policy advocacy; developing and introducing national strategies and masterplans;
pro-active approach to coordinating national efforts targeted at developing entrepreneurship and MSMEs; designing
and implementing entrepreneurship and MSME development programmes; introducing and managing access to
finance tools and implementing them; in addition to its credible track record of positively impacting its client base of
1400+ enterprises, and with the prospect of introducing a Startups and SME Growth Observatory (not present in
Jordan), and tasking it with the provision of information on Entrepreneurship and SMEs to policy-makers,
researchers, economists and SMEs themselves (i.e. improving the monitoring of the economic performance of
entrepreneurship, startups and small and medium sized enterprises (MSMEs) in Jordan and providing an empirical
foundation for the design of SME policies); it is believed that the longer term vision and potential for pioneering new
approaches will respond to the Government’s need to leverage private capital for investment in key business
development and outreach into the governorates infrastructure and continue with the provision of business
development and innovation support activities.
C. PROJECT DESCRIPTION
13. Project Objective
Project Overall Objective:
Supporting and sustaining Startups and SMEs - with particular focus on high-value growth enterprises –to
increase productivity and competitiveness through adopting and applying innovation.
Specific Objectives:
1. Employing innovation, business coaching and other forms of sophisticated support tools, inclusive a growth accelerator
for high growth businesses- facilitating support to high-value growth sectors.
2. Building capacity within Startups and MSME eligible beneficiaries to access competitive finance, technology and knowhow to achieve sustainable growth and create new high-added value employment opportunities.
3. Selecting and training professional service providers to offer quality services to entrepreneurs and MSMEs and
establishing a Business Coach Roster and an advanced interactive online database.
4. Establish an Entrepreneurship and MSME Growth Observatory at JEDCO (inclusive recruitment and training of
technical staff), tasked with a research and monitoring role.
5. Generate a positive and promising MSME deal flow to existing and future Venture Capital Funds and investors in
Jordan and the region.
14. Project Components
This proposal builds on nationally existing efforts, and is aligned to recommendations made in the National
Entrepreneurship and MSME Development Strategy (2013-2017). It proposes the implementation of a new technical
assistance and financial support facility to support the provision of solutions to 50% of the challenges identified
(mainly those covered in points 1,4,6,8 and 10) above. The link between the challenges and the solutions proposed
will be clearly emphasized in the overall objective, specific objectives, expected results and components/activities.
The targeted audience for this project (inclusive all components) include startups and entrepreneurs (with focus on
innovative and traditional ones) in addition to existing enterprises employing between one and 300 full time
employees, and operational in all economic sectors in Jordan. Component 3 target population is further identified in
the description of the component below and referred to as "High Growth Companies."
The project will fund the technical assistance of the contractor/the service provider of diagnostic studies services,
training needs assessments, training programme implementations; certification and accreditation costs, IP
registrations and commercialization that result from the innovations produced by the beneficiary enterprises, etc. of
components 1, 2 and 3 below.
Project Components include:

Component 1: Identifying, diagnosing and recruiting Startups and SMEs with growth potential
motivated and committed to invest in development and innovation.
Sub-Component 1.1: Identifying, diagnosing and recruiting Startups and SMEs with growth potential motivated
and committed to invest in development and innovation.
This component will include the implementation of an open call of interest to solicit and identify Startups and MSMEs
that demonstrate their interest (this constitutes willingness, readiness and ability) to invest in innovation and
technology to facilitate their growth, enhanced competitiveness and employment generation capacity. Eligibility
criteria will be developed to guide the process and guideline to screen and recruit these enterprises shall be
developed by JEDCO and the contractor to ensure the transparency and credibility of the process. Once selected these
companies will undergo a comprehensive diagnostic phase where their needs and priorities for support will be
identified. A detailed business growth plan will be developed and costed in order for funds to be allocated and raised
towards its implementation.
This diagnostic phase will be undertaken and/or managed by the contractor in cooperation with relevantly
specialized business national and international experts. Wherever possible, group and/or sectoral diagnostic services
may be implemented.
Sub-Component 1.2: Training JEDCO Staff:
This will include building the capacity within JEDCO to provide demand driven innovation services to deliver goals
and outputs of the project through working collaboratively with the private sector. The Contractor will be required to
evaluate the skills of the existing JEDCO staff from the relevant Directorate(s) to be assigned to following up on the
implementation of this component. A training needs assessment will also be conducted in order to prepare the
relevant staff to manage and monitor the undertakings of this stage of the project. It is expected that JEDCO staff will
be trained in good and innovative practices to promote the programme, motivate and encourage the Startups and
MSMEs to join and benefit from this opportunity.

Component 2: Providing and Training internationally recognized and accredited, monitored and
specialized business coaching service providers in areas of sustainable growth, productivity
enhancement and competitiveness, technology, innovation and exports development.
Evidence demonstrates the need to upgrade, build capacity and certify Jordanian professional service providers (i.e.
talent pool) to offer specialized and state-of-the-art/cutting-edge support to entrepreneurs and MSMEs in Jordan in
order to coach and enable them to identify, develop and implement their strategic growth plans in addition to
responding to obstacles and barriers existing and/or anticipated in the future to establish their competitiveness and
comparative advantage in the local and target export markets. It is crucial to organise and coordinate the required
talent pool upgrading and development activities, in a manner that ensures that participating enterprises
(beneficiaries of the Growth Programme) receive a focused and integrated support approach from the Government
inclusive an enhanced complimentarity with the coaching elements this national talent pool will be offering.
Sub-Component 2.1: Identify, recruit, train, qualify and promote business coaching service providers:
The component will aim at identifying, assessing, training and providing competent and specialized national and
international coaches to work face to face with Startups and SME owners and management teams to help them to
develop and implement their business strategies, develop their skills, expertise and techniques to overcome the
barriers they face to achieve their targeted growth potentials. Coaching will be provided on a range of general and
specific business areas including but not limited to:
 Fully identify growth potential and developing growth action plans, assessing the resources available and/or
needed to achieve them and costing their implementation,
 Helping on key business issues such as marketing, strategy and sales,
 Helping businesses undertake technology, energy and other efficiency and optimization audits in order to
identify the necessary technology or know-how that needs to be acquired,
 Helping individuals in the senior management team to develop and sharpen their leadership and
management skills,
 Helping businesses to raise external finance, for example by providing tailored specialist help to develop a
successful investment pitch and/or bank financing request dossier,
 Providing advice on how to innovate and commercially exploit innovation or how to identify and protect
intellectual property and copyrights,
 Helping businesses maximize their growth potential by improving productivity, competitiveness and
internationalizing their business.
 Helping business identify with and match-make with global supply chain opportunities in national and
international markets.
 Helping high-growth Startups and SMEs expand their market share and target multinational corporations for
collaboration agreements and licensing technology/IP.
It is worthwhile to note that having national and international business coaches and experts working together will
establish a solid cross-border professional network and platform to share knowledge, experience, transfer skills and
know-how and will offer a more comprehensive opportunity for beneficiary enterprises to be benchmarked against
similar enterprises and competitors in the global market, hence contributing to their strategic growth plans in a
manner that has medium to long-sight goals to achieve. This project component will also require specialized certified
training to be implemented towards the Jordanian national consultancy community identified and recruited to
constitute the home-grown business coach talent pool to ensure that a legacy exists once the project has been
completed. This talent pool will be categorized and reflected in a Business Coach Roster forming the core of a Roster
of Experts to be developed to serve the Jordanian and possibly MENA/GCC region.
Sub-component 2.2: Establish Business Coach Roster and advanced Matchmaking correlations and other
monitoring support features database. This may be an online and interactive tool.
JEDCO will aim at fully integrating these business development service offerings to other forms of support from both
the public and private sector that it is aware of and has access too into one consolidated and multi-layered and
interactive online database. This will assist beneficiary enterprises to have access to correlated technical assistance,
facilities, finance, specialists and networks to support their growth.

Component 3: Exclusively select and support high-growth (defined as a being in a phase in which the
business is achieving a minimum of 20% increase in turnover or staff in three consecutive years)
companies (and with potential for greater genuine and rapid sustainable growth), by implementing
an exclusively advanced intensive coaching, training, certifications and grant contribution
Accelerator programme that is tailored to deliver the strategic intervention to support the aspirations
of this exclusive group of beneficiary companies.
Sub-component 3.1: Exclusive Startups & SME Beneficiary Selection Process Implementation.
This component may include the implementation of an open call of interest to solicit and identify Startups and MSMEs
that demonstrate high growth as per definition above (if they were not already identified and/or attracted in the
process implemented for component 1 above). Eligibility criteria will be developed to guide the process and
guidelines to screen and recruit these enterprises shall be developed by JEDCO and the contractor to ensure the
transparency and credibility of the process. Once selected these enterprises will undergo a comprehensive diagnostic
phase where their needs and priorities for support will be identified. A detailed business growth plan will be
developed and costed in order for funds to be allocated and raised towards its implementation. This diagnostic phase
will be undertaken and/or managed by the contractor in cooperation with relevantly specialized business national
and international experts. Wherever possible, group and/or sectoral diagnostic services may be implemented.
Sub-component 3.2: Provision of sophisticated tailored services, grants and after care services to selected
businesses.
Advanced services will be provided by the contractor and national/international talent pool and delivered to these
high-growth enterprises in a manner responsive to their pace and respective needs. Grants may be provided to
contribute towards facilitating the acquisition of technology (inclusive equipment and software), certifications,
patenting and commercialization of innovation (if applicable), and offering intensive support to companies wishing to
integrate in global value and supply chains.
It is to be noted that a separation between component 1 and 3 has been established in order to facilitate the delivery
of a two tracks and parallel approach to support eligible entrepreneurs and MSMEs. It is a global good practice to
differentiate between the high-growth and slow to normal growing enterprises to expedite their expansion and
further development. Introducing the concept of a business Accelerator to host and provide intensive and tailor made
services and grants to expedite implementations of business growth plans to this select group of enterprises will
allow a facilitated realization of growth prospects that will reflect on the national economy. These businesses will be
in a better position to position their investment needs to banks, VC or investors with the type of support and training
that they may be offered. A good role model for these accelerators is the US Plug and Play Accelerator Programme
serving the ICT sector enterprises in Silicon Valley. The concept of this project's sub-component is that it will work on
an expanded approach of supporting an linking entrepreneurs, startups and MSMEs active in all economic activity
sectors (and not only ICT as Oasis500 does).
For the purposes of implementing Sub-Component 2.1 and Sub-Component 3.1, a promotional campaign to stimulate
demand for consultancy providers and to increase the business perception of the value of coaching services to help grow
the reputation of consultancy service providers and to demonstrate the return on investment through the use of case
studies in key target sectors will be implemented.

Component 4: Establishing a Startups and MSMEs Growth Observatory at JEDCO with the capacity to: i)
monitor the Entrepreneurship, Startups and MSME sector, ii) document enterprise behavior, and policy
related matters and impact, iii) harnessing potential business opportunities, linkages and market intelligence
to provide meaningful insight into the wider targeting of JEDCO activities, iv) adding value and support to
those of the Chambers of Industry, Commerce and business association community in Jordan. The
Observatory will identify national needs and trends, facilitate and advocate for their satisfaction and
utilization.
Sub-Component 4.1: Establish and Equip the Observatory with the necessary hard and software to establish a
service portal and enable operation. This Observatory (a novel specialized unit in Jordan) will allow JEDCO to
employ good practice models implemented in the EU, as the tasks that will be undertaken include researching,
compiling and providing information on Entrepreneurship and MSMEs to policy-makers, researchers, economists and
MSMEs themselves (i.e. improving the monitoring of the economic performance of entrepreneurship, startups and
micro, small and medium sized enterprises (MSMEs) in Jordan and providing an empirical foundation for the design of
SME policies). The Observatory to be established will be in the form of a Unit within the Policy Support Department
within the Cross Cutting Support Directorate at JEDCO. This Observatory will also host the interactive database
containing the talent pool of Jordanian service providers trained by this project. It has organizational development
capacities for JEDCO.
The Observatory will undertake in cooperation with the relevant institutions in Jordan specialized surveys on
entrepreneurship and MSMEs in Jordan and produce/or contribute towards two annual reports the Global
Entrepreneurship Monitor (GEM) and the MSMEs in Jordan Report. The MSMEs in Jordan Report will include
two parts, the first reflecting the state of matters in the sector, meanwhile the second part will focus on a specific
theme relevant to MSMEs in that year (e.g. Competence development in MSMEs, Productivity Enhancement, MSMEs
and Access to Finance, Internationalization of MSMEs etc...). It is worthwhile to note that the EU has established such
an Observatory at a regional level, meanwhile Croatia for example has a good model implementation at a country
level.
In addition to the above role, the Observatory will host the interactive and comprehensive multi-layered (3-tier)
database developed to serve all the other four components of this project, have the task of maintaining and updating
its content, promoting awareness and enhancing and developing the network of its users, gauge all programme
implementations in Jordan and obtaining and coordinating their impact reports (if possible), It will be the core of a
national knowledge base in the area of Entrepreneurship and MSME development in Jordan. The total anticipated
budget to establish, equip and run this Observatory for the first 3 years (duration of this project) is US$ 600k of which
US$ 100k will be in the form of in-kind contribution from JEDCO.
Sub-Component 4.2: Recruit and train 3-5 new specialized JEDCO staff to manage/operate the service.
A maximum of 5 staff members will be recruited for the operation of the Observatory, of which four will be senior and
junior technical researchers, and one administrative support officer. The project will fund the salaries and training of
the employed of 3 – 5 personnel to manage and implement the operations of the Observatory, for the duration of the
project. JEDCO will undertake the necessary steps to sustain their employment and continued function as part of
JEDCO's staff after the completion of the project.
The project will also finance the technical assistance to design and development of the interactive database (if not
already available in the market) that will establish the core knowledge base at JEDCO, and its integration with the
Management Information Systems that JEDCO has, in addition to a suitable capacity server.
Furthermore, it is anticipated that the project will also fund the development and publication of the flagship reports in
the project lifespan, after that JEDCO will undertake the necessary steps to allocate the necessary funds for this
activity sustainability.

Component 5: Providing a positive, supported and credible deal flow to existing and future new Funds
and/or other investors.
Sub-Component 5.1: Undertake due diligence services of identified deal flow to the existing and new Funds
and/or other investors.
Providing a positive, supported and credible deal flow to the two existing Funds dedicated to SMEs in the
MENA region, including those in which the European Investment Bank is participating (e.g. Jordan Capital for
Growth Fund and Badia Impact Fund), in addition to attracting and meeting the needs of potential national and
international investors and investment portfolios of banks, venture capital and/or holding companies.
Sub-Component 5.2: Monitor the deal flow to the existing funds and provide advisory support on the due
diligence services.
EIB will act as ISA of this component by ensuring the monitoring of the deal flow of SMEs that benefit from the
Programme and that could subsequently receive investments (debt, equity) from the existing funds or from future
ones to be established. In order to deliver on this task, EIB (as the ISA) will hire 1 staff resource to be located in Jordan
for a period of 4 years (from Y2-Y5).
15. Key Indicators Linked to Objectives
Key measurable indicators relevant to the corresponding components and are directly linked to Project's objectives
above and can be used in the results framework for project monitoring are:
1a. Number of identified, diagnosed and recruited Startups/MSMEs ready, willing and able to participate in the
Jordan Startups and MSMEs Growth Programme.
1b. Number of trained JEDCO staff to undertake the relevant functions associated with this project implementation.
2 a. Number of trained and certified/accredited specialized business coaching service providers through an
internationally recognized partner in areas of sustainable growth, competitiveness, productivity enhancement,
technology, innovation and exports development. Training delivery models may include online training,
workshops, one-to-one coaching, one-to-many many peer group workshops for needs common to more than one
business and where shared learning can increase the take-up and impact, etc.
2 b. Number of beneficiary high growth potential Startups/MSMEs receiving coaching services.
2 c. Number of high growth potential Startups/MSMEs implementing growth, innovation oriented and/or export
development plans.
2 d. Number of matched Startups/MSMEs with global supply chain opportunities in national and international
markets.
2 e. Number of high-growth Startups/MSMEs with collaboration agreements and/or licensing technology/IP with
multinational corporations.
2 f. Impact assessment of the implementation of these on growth, innovation oriented and/or export development
plans i.e. increased sales, profits, exports, number of export markets, number of employment opportunities
created, etc.
2 g. Number of IP (patents, copy rights, electronic designs, software codes and software etc…) generated, registered
and commercialized (if applicable).
2 h. Number of business or collaboration agreements signed between businesses to achieve international technology
transfer deals and partnering agreements.
2 i. Creation of a JEDCO roster (database) of consultants and business coaches including the segmentation of
expertise and establishing a matchmaking tool providing each high growth Start-up and SME with a choice of
Jordan's best consultants versus their business needs.
2 j. Promotional campaign to stimulate demand for consultancy providers and to increase the business perception of
the value of coaching services to help grow the reputation of consultancy service providers and to demonstrate
the return on investment through the use of case studies in key target sectors.
2 k. Business Coach Performance will be monitored and continuously assessed via client surveys and annual
performance reviews undertaken by Account Managers within the Startups and SMEs Growth Observatory at
JEDCO.
3. Number of exclusive high growth businesses benefiting from this intensive and exclusive service.
4. Establishment and functioning of a Startups and SMEs Growth Observatory at JEDCO. Development and adoption of
an annual action plan to be implemented by the recruited and trained team.
5. Number of supported and credible deal flow Startups and MSMEs (inclusive members of the exclusive high-growth
businesses group) to the existing and future new Funds and/or potential national, international investors, and
investment portfolios of banks, venture capital and/or holding companies.
The project is expected to train 100 business coaches and service providers, support 350 businesses and will create,
within two years of project completion, impact of:


Approximately, USD 50 million economic growth (increase in turnover of participating businesses)
1,000 jobs created
D. IMPLEMENTATION
16. Partnership Arrangements (if applicable)
The implementation of this programme will require contracting the services of national and international service
providers in the fields of business coaching and development, innovation facilitation and development, R&D
evaluation and validation, IP registration and commercialization, supporting high-growth and innovative startups and
existing businesses by understanding and meeting their needs, sourcing and training the necessary human capital
inclusive existing or new employees, sourcing new technology, localizing and facilitating its adoption and training
beneficiary Startups and SMEs on its utilization. Wherever possible, partnerships with academic and R&D institutions
of both the government and private sector in Jordan will be sought by JEDCO.
Furthermore, international certification and accreditation bodies will need to be identified as partners for the
implementation of this project, and agreed with to certify the Jordanian business coaches and service providers.
Jordanian and/or international Universities or research centers will need to be identified and agreed with in order to
undertake R&D evaluation and validation services prior to the IP registration. Identified partners will be coordinated
with and relationship organized through special MOU's at the outset of the project implementation.
JEDCO’s vision for the project is to create the infrastructure conducive to improve the quality of business coaching to
accelerate the economic impact through business turnover growth and new job creation. The legacy of the project will
be created through engagement with indigenous consultancy community to transfer knowledge and know-how.
JEDCO has consulted widely with many stakeholders to ensure that the proposed project is effectively positioned and
integrated within the wider business support landscape in Jordan. As a result of this consultation, the contractor is
required to work closely with JEDCO to adapt and implement these findings in addition to bringing their own
expertise, systems and processes allowing for full intellectual property and data transfer to JEDCO on completion of
project.
The implementation of this programme is directly connected to accessing and leveraging finance from the existing
Funds and future ones in which the ISA has participated. The outputs of this programme will be amongst the main
source of deal flows for these Funds EIB (the ISA) will advise JEDCO on how to improve coordination with the existing
funds so as to ensure access to equity finance to a higher number of MSMEs in the country.
17. Coordination with Country-led Mechanism/Donor Implemented Activities
JEDCO, the EIB and the contractor will work closely with related donor activity (if applicable) to ensure that the
outputs and outcomes of this project contribute towards fulfilling national economic policy and the country objectives
set out in corresponding donor-orientated country strategies for Jordan In particular, JEDCO will work through the
mechanisms established by the Ministry of Planning and International Cooperation in Jordan (mandated to undertake
donor coordination activities) and the EIB will relay to the Deauville IFI working group on MSMEs the advancement
and results of this initiative also with a view to averting duplication of efforts in Jordan.
Below is a brief describing current major ongoing initiatives and activities that JEDCO is aware of and/or spearheading their implementation:
Governmental Support for Entrepreneurs, Start-ups and MSME’s:
Other than JEDCO, the Development and Employment Fund (DEF), and the Ministry of Planning and International
Cooperation Programme IRADA are the main providers of government support to MSMEs. DEF is a major provider of
microfinance, both through direct lending to micro and small enterprises, and indirectly through grants to other
microfinance institutions (MFIs) for relending to microenterprises. IRADA has 32 offices throughout Jordan offering
business counselling services to micro and small enterprises in the governorates (enterprises with less than JD
100,000 of investment), including feasibility studies, marketing support, and training). JEDCO has signed a
cooperation agreement with IRADA to expand its outreach and services provision in the different governorates of
Jordan.
JEDCO focuses on supporting economic enterprises from the idea to internationalization phases of their life-cycle.
Accordingly it supports and manages a network of eight innovation centers and business incubators across Jordan.
Furthermore it has specialized programmes to support established small and medium enterprises (with 5-300
employees) by facilitating their modernisation, enhancing their productivity and competitiveness (including in export
markets), and also provides some programme support for new entrepreneurs (support for business incubators, seed
grants for start-ups). JEDCO is currently studying the feasibility of establishing Business Development Units (BDUs) in
five pilot governorates with the technical support of the World Bank MSME Facility Programme. This initiative will be
completed in April 2013 and is directly linked to the World Bank US$ 70 million credit line programme being
implemented by the Central Bank of Jordan.
Flagship government and donor support programmes implemented by JEDCO include:
1. EU and Government funded Jordan Service Modernization Program (JSMP Phase I & II) (2009-2017) with a total of
Euro 30 million with the total number of 264 beneficiaries to date.
2. EU and Government funded Support to Enterprise and Export Development Program (JUMP I & II) (2005 – 2017)
with a total of Euro 45 million with a total number of 1085 beneficiaries to date.
3. Government funded export promotion programme implemented since 2005 with an average annual participation of
350 – 450 beneficiaries.
5. The USAID US$ 30 million SME Financing Programme leveraging Loan Guarantees of US$ 300 million (OPIC Fund).
6. Increasing access to finance through The Banking Window Programme implemented by JEDCO which offers
financial coaching and loan applications dossier preparation services to Jordanian companies looking for greater
access to finance. This programme is listed as a best practice program in the EU-MENA Database of Good Practices
managed by DG Enterprise and Industry in the EU.
8. Establishing and launching a Governorate Development Fund (with a total investment of US$ 350 million) over the
next five years.
9. Creating two venture capital funds dedicated to support SMEs in the early stage and growth phases with the
participation of the EIB and other financing institutions. The Capital for Growth Fund with a first closing of US$ 30
million is already active and is managed by Abraaj Capital. Secondly, EIB signed equity participation, under European
Neighborhood Partnership Instrument (ENPI) resources, of up to EUR 4m in Badia Impact Fund, a closed-end venture
capital fund that will be managed by a first-time team actively supported by an established Jordanian venture capital
firm.
The Fund seeks to invest seed, start-up and expansion capital in early and growth stage Technology, Media, and
Telecom (TMT) Small and Medium-Sized Enterprises (SMEs) located predominantly in Jordan or in one of the
Mediterranean partner countries. This operation supports venture capital that is key not only in providing long term
equity and quasi-equity funding to the real economy but also in providing long term strategic and operational value
added to start-up investee companies.
In the area of enhancing the business environment:


Developing and formulating a Services Sector Development Master Plan (SDMP) to promote the development of
the services sector – contributing 67% to GDP.
Developing and formulating a National Startups and MSME Strategy and Law.
As the project will be implemented by JEDCO, it will already be coordinated with the other ongoing and potential
pipeline Entrepreneurship, Start-ups and SME upgrading and development support programmes in Jordan. The
project will also ensure that JEDCO communicates to ambitious businesses the Government’s new and existing
initiatives is which it can leverage support for growth made available through loan guarantees, technical assistance
and targeted grants. As such, JEDCO will enable an integrated business support offering, signposting businesses to
other forms of support, and overcoming inertia and barriers to growth.
EIB will leverage the results of this project to improve the allocation of its risk capital funds and loans to Jordan, and
will coordinate with other IFIs to increase the impact of their operations on SMEs, job creation and growth. Results
could assist in the development of the SME Guarantee facility set up by IFC, EIB and AFD. In addition, EIB will consider
through a separate initiative to improve the access by SMEs in Jordan to capital markets (2nd tier capital market
initiative) and will ensure coordination with these results.
18. Institutional and Implementation Arrangements
The project will be implemented by JEDCO, the EIB and a contractor with a demonstrated track record of similar
service delivery preferably in Jordan and/or the MENA region. An Agreement will be signed between JEDCO and the
EIB as soon as the grant application is approved to enable the implementation of the project in September 2013. An
international tender to identify and contract a qualified service provider to support JEDCO in the implementation of
Components 1-4 below shall be undertaken asap and as per the procurement procedures of the EIB. The role of the
contractor(s) will be further elaborated on in the detailed terms of reference that will be part of the tender for
services to be procured.
Each implementing agency will implement its risk management system where capacity, governance, fraud and
corruption, etc. are concerned and as per the good practices, operational manuals and standards they apply. Financial
management, reporting and procurement procedures will be implemented in accordance to the Transition
Fund/donor requirements. Flow of funds and the accountabilities for financial reporting will be agreed upon with the
EIB (the ISA responsible for supporting JEDCO/Jordan in this project).
JEDCO will work with the internationally recruited contractor to implement this project and to enable the transfer of
intellectual property and know-how into the Jordanian economy. The contractor must demonstrate their experience
of working with the business community (preferably the Jordanian Business Community) to create innovative
products, improve productivity and increase growth through international trade and partnerships. The contractor
must also demonstrate their experience in attracting external funding through donors and the private sector to
increase the impact of this Transition Fund Grant. Due consideration will be given as relevant to EIB’s procurement
rules and requirements as ISA of the Transition Fund.
The Contractor will undertake in close collaboration with the relevant Directorates at JEDCO the actions related to
Components 1-4.
The institutional capacity of JEDCO will be developed so that the organization receives knowledge transfer, systems and
processes for designing, managing and evaluating these pioneering economic development initiatives. The capacity building
will also create a business intelligence model - Establishing a Startups and SMEs Growth Observatory at JEDCO - to
facilitate higher value engagement with Jordanian businesses, building trust and reputation for this project and new
initiatives, helping to evolve programme design to adapt to business needs and changing economic conditions in global
markets, in addition to undertaking the publication of two annual flagship reports to reflect the state of entrepreneurship in
Jordan (GEM) and the MSME's in another separate report. This Observatory will be the nucleus of the Knowledge
development and management system that JEDCO hopes to establish as part of its organizational development requirements.
A dedicated EIB resource will be responsible for carrying out the activities under Component 5 as outlined in Section 14
above.
19. Monitoring and Evaluation of Results
The design of the project will provide transparency, accountability and participation of the stakeholder community
and, in particular, JEDCO’s active involvement in the project through close working relationship with the selected
delivery partner. The contractor will be required to have an office in close proximity to JEDCO to ensure a close
working relationship is achieved. The delivery model will track progress and gather impact figures using proven
techniques which are based on international methodologies – adapted specifically for the Jordanian business
environment – to be independently audited by a recognized auditor. Processes to capture outputs and outcomes are
required to be built into the governance of the contract with training provision made available for JEDCO staff.
The indicators relevant to the project objectives will be the key method of measuring success. The contractor will
have an active role in monitoring programme delivery and impact assessment as appropriate. Results are anticipated
as being:
1. USD 50 million increases in business turnover within 5 years of programme implementation.
2. 1,000 new jobs created within 5 years of programme implementation.
Whilst the outcomes above will be the primary measure of success, it is expected that JEDCO and the contractor will
also track outputs measured through the following targets.
 350 businesses assisted
 350 growth plans created
 100 trained Business Coaches and Service Providers.
 Other quantifiable business benefits listed by participating businesses e g cost savings achieved through
improved productivity, etc.
Tailored follow-up and reporting templates will be developed by JEDCO and the contractor for the components 1-4 to
track progress in the project and business coaches' performance, MSME customer satisfaction, and business coach
feedback on client's commitment to the programme. A regular interval information collection process shall be
initiated by JEDCO's M&E Department and a random quality assurance testing of data shall be undertaken in a regular
manner as well to ensure information accuracy and validation.
EIB acting as the ISA will contribute to the monitoring and evaluation of Component 5 of the Programme.
E. PROJECT BUDGETING AND FINANCING
20. Project Financing (including ISA Direct Costs2)
Cost by Component
Component 1: Identifying, diagnosing and recruiting
Startups and SMEs with growth potential motivated
and committed to invest in development and
innovation.
(a) Sub-component 1.1: Identifying, Diagnose and Recruit
Start-ups and SMEs to enter the Programme.
(b) Sub-component 1.2: Training JEDCO Staff
500,000
Country
CoFinancing
(USD)
10,000
475,000
5,000
25,000
5,000
Component 2: Providing and training internationally
recognized and accredited, monitored and specialized
business coaching service providers in areas of
sustainable growth, productivity enhancement and
competitiveness, technology, innovation and exports
development.
(a) Sub-component 2.1: Identify, recruit, train, qualify
and promote business coaching service providers.
(b) Sub-component 2.2: Establish Business Coach Roster
and advanced Matchmaking correlations and other
monitoring support features database. This may be an
online and interactive tool.
Component 3: Exclusively select and support highgrowth companies, by implementing an exclusively
advanced intensive coaching, training, certification
and grant contribution Accelerator programme to
support the aspirations of this exclusive group of
beneficiary companies.
(a) Sub-component 3.1: Exclusive Startups & SME
Beneficiary Selection Process Implementation.
(b) Sub-component 3.2: Provision of sophisticated
tailored services, grants and after care services to
selected businesses.
Component 4: Establishing a Startups and SMEs
Growth Observatory at JEDCO.
(a) Sub-component 4.1: Establish and Equip the
Observatory with the necessary hard and software to
establish a service portal and enable operation.
(b) Sub-component 4.2: Recruit and train 3-5 new
specialized JEDCO staff to manage/operate the
service.
Component 5: Providing a positive, supported and
credible deal flow to existing and future new Funds
and/or other investors.
(a) Sub-component 5.1: Undertake due diligence services
of identified deal flow to the existing and new Funds
760,000
2
Transition
Fund
(USD)
Other CoFinancing
(USD)
Total
(USD)
NA
510,000
NA
NA
760,000
NA
NA
1,700,000
100,000
(In-kind)
NA
600,000
NA
NA
710,000
50,000
1,700,000
100,000
1,600,000
500,000
200,000
of which
100,000
(In-kind)
300,000
190,000
(ISA EIB:
90,000)
ISA direct costs are those costs related to the ISA’s direct provision of technical assistance within the project.
190,000
and/or other investors.
(b) Sub-component 5.2: Monitor the deal flow to the
existing funds and provide advisory support on
the due diligence services.
Total Project Cost
(ISA
EIB:100,000)
3,650,000
110,000
3,760,000
21. Budget Breakdown of Indirect Costs Requested (USD)
Description
For grant preparation, administration and implementation
support (EIB):
Staff time
Staff travel
Services
Total Indirect Costs (EIB)
Amount (USD)
140,000
6,000
54,000
200,000
F. Results Framework and Monitoring
Project Development Objective (PDO):
PDO Level Results
Indicators*
Indicator One:
a) Identifying, diagnosing and
recruiting Startups and SMEs
with growth potential
motivated and committed to
invest in development and
innovation.
b) No. of JEDCO Staff (Account
Managers) trained
Indicator Two:
Providing internationally
recognized and accredited,
monitored and specialized
business coaching service
providers in areas of
sustainable growth,
competitiveness, technology,
innovation and exports
development.
Cumulative Target Values**
Unit of Measure
Baselin
e
YR 1
YR 2
YR3
YR 4
YR5
a) No. Of
Startups & SMEs
0
100
175
250
300
350
b) No. of Staff
Trained
0
5
10
15
25
25
0
25
50
75
100
100
10%
20%
50%
65%
75%
Frequen
cy
Quarterly
a) No. Of trained
Business
Coaches and
Service
Providers.
Quarterly
0
b) Growth
Impact of
Services
Delivered on
Businesses.
Data Source/
Methodology
Responsib
ility for
Data
Collection
Startups and
SMEs
JEDCO
Contractor
JEDCO
Contractor
& JEDCO
JEDCO
Contractor
Service
Providers
International
Service
Certification
Bodies
Startups and
SMEs
Contractor
& JEDCO
JEDCO
Contractor
Providers
International
Service
Certification
Bodies
Startups and
SMEs
Contractor
& JEDCO
JEDCO
Contractor
2.
c) Database at
JEDCO
0
1
1
1
1
1
Indicator Three:
Exclusively select and support
high-growth companies, by
implementing an exclusively
advanced and intensive
coaching Accelerator
programme to support the
aspirations of this exclusive
group of beneficiary
companies.
a) No. of
exclusive high
growth Startups
& SMEs selected.
0
25
50
100
135
175
b) Variety of
tailored
services/Coachi
ng Days
obtained.
0
10
20
30
40
50
Indicator Four:
Observatory
0
1
1
1
1
1
Quarterly
Quarterly
Description
(indicator
definition
etc.)
Establishing a Startups
&SMEs Growth Observatory
at JEDCO
Indicator Five:
Providing a positive,
supported and credible deal
flow to the existing and future
new funds and/or other
investors.
3-5 Trained
Staff
0
3
5
5
5
5
& JEDCO
JEDCO/EIB
Jordan Capital
for Growth Fund
Badia Impact
Fund
&/or other
investors.
N.B An option to include an independent evaluation of the project should be considered to audit the results claimed by the contractor.
No. of Due
Diligence
Studies and
generated Deal
flows
0
0
No. will be established by the 2nd Year of project
implementation.
Provisionally it would aim at supporting 10% of the
high growth SMEs that will benefit from the
Programme.
Quarterly
Contractor
&
JEDCO/EIB
INTERMEDIATE RESULTS
Intermediate Result (Component One):
a) Identifying, diagnosing and recruiting Startups and SMEs with growth potential motivated and committed to invest in development and innovation.
b) No. of JEDCO Staff trained
Intermediate Result indicator
1: Contractor Recruited and
Mobilized
Within 3 months
NA
By month
3
Intermediate Result indicator
2:
Marketing communication
created and JEDCO website
updated
Within 3 months
NA
By month
3
1. JEDCO
Marketing
Communication
Strategy.
2. JEDCO Website
Contractor
& JEDCO
Intermediate Result indicator
3:
Contractor Delivery office and
JEDCO implementation Unit
established
Within 3 months
NA
By month
3
Unit
Establishment,
staffing and
operations at
JEDCO.
Contractor
& JEDCO
1. Call for
proposal to
identify
contractor.
2. Evaluation
Committee
Reports on
Selection
Process.
3. Contract
Signed between
JEDCO and
Contractor.
Payment
transfers for
services
rendered.
Contractor
& JEDCO
Intermediate Result (Component Two):
Providing internationally recognized and accredited, monitored and specialized business coaching service providers in areas of sustainable growth, competitiveness,
technology, innovation and exports development.
Intermediate Result indicator
1:
Attract, Recruit & Certify
Business Coaches
Within 6months
NA
15
Coaches
30
Coaches
50
Coaches
65
Coaches
85
Coaches
Quarterly
1. Call for
Proposal from
interested
business
coaches.
2. Selection
Reports for the
business
coaches.
3. Attendance to
training records.
4. Copies of
certificates
awarded to
Business
Coaches.
Contractor
& JEDCO
Intermediate Result indicator
2:
Offer Services to Startups &
SMEs
Within 6 months
NA
50
100
150
200
250
Quarterly
1. Copies of
communication
listing the
services offering
to the MSME
community.
2. Expressions of
interest received
from the MSME
community.
3. Copies
Services
contracts to
MSMEs.
Contractor
& JEDCO
Intermediate Result (Component Three):
Exclusively select and support high-growth companies, by implementing an exclusively advanced and intensive coaching Accelerator programme to support the
aspirations of this exclusive group of beneficiary companies.
Intermediate Result indicator
1:
Identify & Engage With
targeted Startups and SMEs
Within 6 months
NA
5
15
35
50
75
Quarterly
1. Applications of
Interest from the
MSMEs.
2. Assessment
Reports of
applicant
MSMEs.
3. Copy of
Agreement with
MSME to commit
to the support
program.
Contractor
& JEDCO
Intermediate Result indicator
2:
Provide Tailored Services
Within 6 months
NA
3
7
15
20
35
Quarterly
List of services
provided and
Time plan for
Contractor
& JEDCO
execution.
Intermediate Result (Component Four):
Establishing a Startups and SMEs Growth Observatory at JEDCO
Intermediate Result indicator
Within 9 months
1
1
1:
Establishing the Observatory
Intermediate Result indicator
2:
Recruiting & Training Staff
Within 9 months
2
3
1
1
1
1
Quarterly
JEDCO Board of
Directors
Decision to
Establish and
staff Observatory
and integrate it
in the
Organizational
chart as part of
the Policy
Department at
the Cross Cutting
Support
Directorate.
Contractor
& JEDCO
4
5
5
5
Quarterly
1. Posts
advertisement.
2. Shortlisted
Candidates
Interview
reports.
3. Staff
Contracts.
4. Staff training
needs
assessment
reports.
5. Staff
attendance of
training
programs.
Contractor
& JEDCO
Copies of Due
Diligence
Studies.
Contractor
&
JEDCO/EIB
Copies of
Investment
agreements.
Contractor
&
JEDCO/EIB
Intermediate Result (Component Five):
Providing a positive, supported and credible deal flow to the existing and future new Funds and/or other investors.
Intermediate Result indicator
To Be
NA
NA
Quarterly
1:
Established
Provisionally it would aim at supporting 10% of the
No. of Due Diligence Studies
high growth SMEs that will benefit from the
Conducted.
Programme.
Intermediate Result indicator
To Be
NA
NA
Quarterly
2:
Established
Provisionally it would aim at supporting 10% of the
No. of Successful Startups and
high growth SMEs that will benefit from the
SMEs that attract investments
Programme.