Jordan’s banks are a haven of stability in the Middle East
The banking sector in Jordan is one of the drivers behind the country’s developing economy, but comes with its challenges. World Finance spoke to Musa Shihadeh, CEO and GM of Jordan Islamic Bank. He talks about the growth of Jordan’s banking sector, the central bank’s adoption of international regulations, Jordan Islamic Bank’s adherence to Sharia […]
The banking sector in Jordan is one of the drivers behind the country’s developing economy, but comes with its challenges. World Finance spoke to Musa Shihadeh, CEO and GM of Jordan Islamic Bank. He talks about the growth of Jordan’s banking sector, the central bank’s adoption of international regulations, Jordan Islamic Bank’s adherence to Sharia principles and its social responsibility.
World Finance: The banking sector in Jordan is one of the drivers behind the country’s developing economy, but comes with its challenges. With me to discuss is Mr Musa Shihadeh, CEO and GM of Jordan Islamic Bank.
Well Mr Shihadeh, if we might start with the banking sector in Jordan. How does it stand today, and since its implementation in 1978 how is Islamic finance growing?
Musa Shihadeh: Jordan banking is a stable sector, they are growing. Last year growth was in assets, almost five percent and in investments about seven percent and deposits about four percent. And they are sound, profitable and doing fine and keeping up with the international standards. Islamic banking started in 1978, my bank was the start. Now they have 15 percent of the assets of the Islamic countries banking sector; 22 percent of the investment, facilities and lending and about 16 percent of the deposits. So they are doing fine, all of them are controlled very well according to the Central Bank of Jordan regulations and applications.
World Finance: Well obviously there’s been a lot of unrest in the region, how is this impacting Jordan’s banking sector?
Musa Shihadeh: Of course first of all it’s impacting the industry. We used to export to Iraq, Syria, Libya and Yemen. Now with the unrest there, trade and exports have turned down; and it’s affected the bank’s activities – supporting, helping and lending for these sectors. The banks turned to invest through the individuals, small projects, SMEs, in the country in order to enhance and develop their business. And the banks are still making a profit and doing fine.
World Finance: Well considering the instability nearby, Jordan actually acts as a peaceful hub for foreign investors, so what does the banking sector offer?
Musa Shihadeh: The banking sector is well-equipped, applying international standards. The staff in the banking sector is very educated and they service local and foreign investors. They welcome them, we keep up with all international standards and therefore foreign investors are welcome and will be serviced as if they are in any country outside Jordan.
World Finance: And in terms of regulation, how developed is the banking sector?
Musa Shihadeh: The banking sector is very developed, because Central Bank of Jordan applies international regulations. They keep up with the banking sector in order to make training for all to comply with these international applications.
World Finance: And how have you incorporated corporate social responsibility into your long-term plans?
Musa Shihadeh: Being an Islamic bank we have to apply the Sharia application in order to service the community in using our funds and money and services. The bank offers free loans for people to use in education, medicine, or sometimes any other needs.
There are two committees in the bank for social responsibility. One for the management and the other for the board of directors, to direct our business. And we have a plan to get social responsibility agreements; we were granted that for our ISO2600 applications. And that helps us a lot in our plans in order to further our business, help SMEs, help the unemployment and our investment and so on.
World Finance: And finally, what’s next for the bank; talk me through your future plans?
Musa Shihadeh: We concentrate on our customers. We try always to be trusted by our customer and ask our customer to be loyal to us by the services we give them. We always find new services or financing or tools in order to service them. We try to apply the latest technology in our services to let the banker feel and the customer feel, that we are a bank as if he is in Europe or any place. Because we feel that trust services and loyalty and products that help the customer, make him continue with us.