liwwa secures debt capital to fuel SME lending and access to finance

The Dutch Good Growth Fund (DGGF) track ‘financing local SMEs through investment funds’, which a consortium of Triple Jump and PricewaterhouseCoopers manage on behalf of the Dutch Ministry of Foreign Affairs, has announced it is supporting Liwwa, Jordan’s first digital lender catered to small businesses.

The DGGF aims to improve access to finance for underserved SMEs, as these businesses form a crucial part of the economies of emerging countries. Limited access to finance for these SMEs is commonly seen as a main barrier to growth.

In Jordan, SMEs are the primary engine of jobs in the economy, employing up to 65% of the labor force. However, with up to 3 out of 4 enterprises facing obstacles to accessing finance, the “missing middle” gap is pronounced.

Established in 2015, Liwwa offers affordable, unsecured loans in local currency equivalent to USD 7-70 thousand that are tenured between 3-36 months for trade and asset financing. Shortage of credit histories and collateral, and high transactions costs are amongst the factors prohibiting traditional financial intermediaries from serving the SME segment. By leveraging digital platforms and data-driven approaches, Liwwa streamlines onboarding and assessment processes and builds a structured credit rating tool to circumvent the conventional obstacles to SME lending. The loan application process takes place entirely online; the resulting product enables borrowers to receive credit decisions within 48-hours and a competitive, risk based pricing. The product is based on Islamic financing principles.

Through the Seed Capital and Business Development (SCBD) program, DGGF aims to fuel Liwwa’s growth and its ability to attract larger investments from local and international sources. In doing so, the facility deployed by SCBD will blend debt capital to contribute to portfolio expansion with technical assistance aimed at enabling Liwwa to enhance its product and risk management capabilities.

Ahmed Moor, CEO of Liwwa: “Triple Jump (fund manager of DGGF) has been an extraordinary partner for Liwwa. While the resources underpinning the transaction will contribute greatly to our viability, DGGF’s focus on strengthening our institutional competencies and capabilities will ensure our long term profitability and stability.”