Bukkehave is proud to announce the delivery of one of its buses to Jordan. This micro-finance mobile bus branch has helped more than 800 people in Jordan’s most remote regions to finance their businesses.
As written in an article on Medium.com, the bus allows people like Nuha Khaleel — a married woman in her 40s with five children who operates her thriving tailoring business from home, receive a second loan to further expand the range of services she offers to her clients. Nuha lives in the remote Al Shobak region of Ma’an governorate in Southern Jordan. Without the mobile branch bus there to service her area, Nuha would have had no access to finance to start her business.
Nuha is among hundreds of women in Wadi Musa, al-Shobak and Al-Hessa/Al-Jarf, that are reached by Tamweelcom through its mobile bus route in the southern Jordanian governorates of Ma’an. Prior to the launch of the Tamweelcom mobile bus in June 2017, these towns were served by few microfinance institutions (MFIs), and the community had very limited access to finance. The Tamweelcom mobile bus branch serving the Southern regions of Jordan was funded by the USAID Jordan Local Enterprise Support Project (LENS).
Out of all regions in Jordan, Ma’an governorate has the lowest outreach by microfinance institutions. Due to its large size and low population density, it was extremely difficult and expensive for MFIs to extend their financial services in such remote rural areas. For such reasons, one MFI had just closed its branch in Ma’an in May 2017. As of June 2017, only 3 MFI branches were present in Ma’an.
A comprehensive survey conducted by USAID LENS showed that 80% of micro and small enterprises in Jordan don’t have a bank account for their business and generally lack access to financial services. Microfinance institutions in Jordan typically fill the gap, by providing financial services to underserved and vulnerable populations. However, microfinance institutions in Jordan require support and technical assistance to further build capacity and deploy new and innovative means of product and service delivery. For example, with USAID support, Tamweelcom is currently the only microfinance institution to operate mobile branches in the Kingdom.
Aware of these complex market challenges, USAID LENS supported Tamweelcom to set up the mobile branch bus to expand its outreach to unserved markets in remote areas among vulnerable communities, lowering transaction costs and transport time for clients.
The mobile branch bus is a multi-function service center with a team of 5 officers: one Branch Manager, two Loan Officers, one teller and a driver. The bus offers most of the services as a brick-and-mortar branch, including consultation sessions with current and potential clients to discuss their needs, advising clients on the most appropriate financial products, making payments and receiving disbursements, and ultimately supporting their business growth and increase their revenues.
Since its launch in June 2017, the mobile bus has serviced more than 840 new MSE clients, 540 of which were women (64% women) and disbursed $890,000 in loans. Based on LENS projections, by June 2019, the bus could reach 1,300 MSEs and disburse $ 1.4 million.
For businesses operating in these Southern regions, the mobile bus branch enables better access to financial services for micro and small businesses, as many residents lack access to finance and other services for their businesses and that would not yet be financially viable to serve with a brick-and-mortar branch.
Above all, the achievement in financial inclusion outreach among women (64% of women businesses finances) are remarkable and promising, in a country that displays in 2017 one of the lowest female labor force participation rates in the world (13%), where only 27% of women are considered financially included and where the gender gap reaches position the country 139th out of 144 countries.
The Tamweelcom mobile bus achieves another USAID LENS goal: thanks to its route in remote areas it is 1.8 times more likely to reach and provide loans to individuals in vulnerable areas compared to any other USAID LENS current activity.
Similar mobile bus projects are known not only in developing countries in the Middle East or in Africa, but also in the heart of Europe, in countries such as Spain (Bankia bank), England (Natwest bank) and Germany (Sparkasse bank), where banks decided to invest in smart innovative branchless bus to reduce the costs of old brick and mortar retail offices, while maintaining face to face services with clients in remote areas with low density population and with segments of society not yet comfortable with on-line or mobile services and who still prefer and trust the weekly or monthly face to face interaction with tellers or loan officers.
In an era of digital innovation, when individuals and clients all over the world look to be served through innovative online/mobile services, DFS/Fintech models are powerful drivers of financial inclusion. As the world of digital finance expands, new risks to clients emerge. USAID LENS and Tamweelcom recognized the importance of remaining close to the clients, providing first hand support and advice where it is most needed.
While we continue investing in these digital financial services, it remains good news that Tamweelcom clients living in remote and underserved vulnerable areas of Ma’an like Nuha will be able to discuss, understand and access face-to face financial services through multiple channels thanks to the mobile branch bus supported by USAID LENS.