WFY’26: Factoring in Jordan – a market on the rise

Jordan’s factoring market continued its steady evolution in 2025, reinforcing its role as an increasingly important source of working capital for SMEs and mid-sized corporates. In this country report, Hassan Alhijazin, Senior Manager – Global Transaction Banking at Bank al Etihad, examines the key developments shaping the market, from rising transaction volumes and changing client attitudes to legal and regulatory developments, digital innovation, and the outlook for future growth. The article included in the World Factoring Yearbook 2026 (WFY’26) provides a comprehensive overview of how receivables finance is becoming an integral component of Jordan’s corporate finance landscape, while highlighting the opportunities and challenges that lie ahead. 

Below is an excerpt from his outstanding article.

Jordan’s macroeconomic environment in 2025 was characterised by moderate but stable economic growth. The country’s GDP expanded by approximately 2.6 – 2.8 per cent, while inflation remained relatively contained. However, interest rates stayed elevated as a result of global monetary tightening cycles, which influenced borrowing costs across the banking sector.

Higher financing costs for traditional lending products, such as overdrafts and short-term credit facilities, indirectly increased the attractiveness of factoring as an alternative liquidity solution. For many companies, particularly SMEs, factoring offers a flexible way to accelerate cash flows without increasing traditional balance sheet debt.

Payment trends and credit behaviour

Payment terms in the domestic market typically ranged between 60 and 120 days, although in certain industries payment periods extended beyond 150 days. While payment discipline improved slightly during 2025 compared with the previous year, credit risks remained uneven across sectors, particularly in supply chains connected to construction and infrastructure projects.
Factoring providers responded by strengthening credit assessment processes, implementing tighter debtor concentration limits, and enhancing monitoring of receivables portfolios.

SMEs and attitudes toward factoring

Small and medium-sized enterprises represent more than 90 per cent of registered businesses in Jordan, making them a central component of the factoring client base. In recent years, the perception of factoring among SMEs has gradually evolved. It is increasingly viewed not as a financing method of last resort, but as a practical tool for managing working capital.

For many companies, factoring now serves three main purposes:
• Improving cash flow predictability
• Mitigating credit risk in non-recourse structures
• Supporting export growth and trade expansion

Nevertheless, some family-owned businesses continue to prefer conventional overdraft facilities due to familiarity and perceived simplicity.

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To read the whole article and 50 other specialist articles and country market reviews, order World Factoring Yearbook 2026 here.