Most banks today offer both financial and social services. They boast a newfound concentration on raising awareness of important social issues, thereby improving the lives of people across the world. These banks are also focused on keeping the trust of their clients by committing to the introduction of innovative new products and services. By offering more than simple financial products, banks can be agents for social good.

Regional leader
Since its first branch opened in 1979, Jordan Islamic Bank (JIB) has offered a variety of Islamic banking products and Sharia-compliant services to its customers. The pioneering bank has since expanded to 97 offices and 182 ATMs in order to reach all of its clients, wherever they may be.

Speaking to World Finance, CEO and General Manager of JIB, Musa Shihadeh, said the organisation is making outstanding progress to ensure its future sustainability, while also taking on the role as a leader in the region.

One example of the bank’s leadership across the Middle East and Northern Africa (MENA) region stems from its uptake of the ISO 26000 guidelines. Shihadeh told World Finance: “The project was intended to promote a common understanding of ISO 26000 guidance on social responsibility in the MENA region. Through this, we hope to achieve positive results in regards to sustainable environmental, social and economic development.”

In 2014, JIB also initiated a five-year strategy to ensure its operations became more environmentally friendly and sustainable. With the completion of this plan now approaching, the bank has already achieved a number of its ambitious goals.

One such target was making sure half of the bank’s energy needs were supplied by renewable sources. This started in 2015 when JIB made the move to power its head office and several branches with solar power, followed by another 18 branches in 2016. “JIB further developed the plan by establishing two power stations, one in the north of Jordan and the second in the east of the capital”, Shihadeh said, adding that completion of the stations is expected in 2017.

Despite the massive scope of these plans, this is only a small part of JIB’s sustainability initiative. The bank also sponsors local environmental efforts, including the country’s fourth National Student Environmental Conference and the Jordan Environment Society’s recycling programme. It is also in regular contact with customers, offering suggestions on how they can save energy. Shihadeh said the bank also has a number of environmentally friendly financial products that are now available to customers: “JIB offers a special financing programme to encourage citizens to use hybrid cars in order to protect the environment, and to save them the cost of petrol too.”

Jordan Islamic Bank hopes to continue as a pioneer in the Islamic banking industry
while achieving success through its partnerships

Furthermore, the bank is committed to offering products that help those who are in need. Shihadeh said JIB is currently creating products with special terms in order to enable people to start projects that will help pull themselves above the poverty line.

Banking in Jordan
Jordan has a dynamic banking sector, offering both traditional online products and Sharia-compliant banking. In the country’s stable and secure market, Shihadeh said the banking industry is highly committed to innovating and offering new, dynamic products: “The banking sector is committed to supporting and financing the SME sector, which represents the majority of the local economy.”

However, Shihadeh said there is still work that needs to be done in order to make sure Jordan’s banking sector is ready for the future: “All banks in Jordan should be committed to attaining the latest innovative products and technology in the banking industry, as well as looking forward, while gaining the trust of all people.”

Another way Shihadeh believes the industry should develop is by making sure local banks offer finance products with easy terms, together with further incentives to clients who are interested in working within environmentally friendly industries. Poverty and unemployment are other problems Shihadeh believes banks have the power to improve, which they can achieve by making this a top priority and by making greater efforts to promote financial inclusion.

Financial inclusion
“The subject of financial inclusion has become one of the main topics now raised at financial conference tables, both locally and internationally”, according to Shihadeh. “This is because financial inclusion is a key factor in the construction of inclusive and sustainable development across world development strategies, and plays an important role in solving the problems of poverty and unemployment. Greater financial inclusion can also increase productivity, advance the prospects for development and improve both social and financial stability.”

Shihadeh believes a shift is occurring in response to international trends. Specifically, the G20 countries have realised the importance of financial inclusion, which is why in 2010 they established the Global Partnership for Financial Inclusion. Its advancement is considered a priority at JIB. He explained: “Financial inclusion helps protect consumers and promote financial literacy in the community. It provides mechanisms to support SMEs to gain access to funding sources, the development of electronic payment systems and the empowerment of women by providing easy and convenient access to finance instruments.”

Shihadeh said that being at the start of a movement to encourage greater financial inclusion is an exciting prospect. As part of his additional role as Chairman of the Association of Banks in Jordan, Shihadeh is developing a multi-year action plan to fast-track greater financial inclusion in the country. The plan ultimately has three goals: providing access to financial services, encouraging the use of financial services, and ensuring these financial services are of the highest quality.

Jordan Islamic Bank has branched out its services
to other industries and is developing a number of fields that are important to the future of Jordan

This will be a difficult challenge to overcome, and will require both Jordan’s banking sector and its regulatory bodies to work together to transform the industry. According to Shihadeh, JIB is strongly committed to achieving these goals. This includes strengthening the geographical spread of financial institutions to make them more accessible, while also taking advantage of technological developments to make accessing finance easier. From a regulatory perspective, the establishment of a credit information company is also a priority.

Appropriate legislative environments that support financial inclusion while ensuring the products developed meet the needs of everyone in society are also a must. While challenging, an environment that supports companies of all sizes is possible through a lot of hard work.

“In addition to the innovation of new financial products, at the same time we must ensure consumer protection regulations to solidify the fair and transparent treatment of customers, set up a system to deal with complaints, provide adequate information to customer about financial transactions, and provide an advisory service to them”, Shihadeh added. “It is also important to enable companies that are suffering from financing issues – especially those related to providing guarantees – to find a structure that enables them to implement new projects and expand.”

Against this backdrop, JIB has branched out its services to other industries and is now working on developing a number of fields that are important to the future of Jordan. The company is also focusing on the health sector, with new products recently launched to help people finance the cost of their medical expenses. As a leader of the local industry, through efforts like these, the company can start fostering greater financial inclusion and the benefits it brings.

Further expansion plans
The future of JIB looks bright, with Shihadeh setting out a clear list of priorities for the bank moving forward. The bank hopes to continue as a pioneer in the Islamic banking industry while achieving success through its partnerships and agreements. It has also set the goal of reaching one million accounts in the next year – all of which will occur while the bank continues to be a leader in both social and business developments, such as through further investments in green technology.

“We will maintain JIB’s leadership through economic and social development, while meeting the aspirations of our clients and translating the Islamic banking mission in all aspects to serve society”, said Shihadeh.

Though this is in many ways a steep challenge, JIB is set to continue its successful journey into the future. Shihadeh added: “JIB is committed to being a pioneer in Islamic banking globally and to achieving growth in all banking services.

Finally, and most importantly, JIB remains committed to keeping the trust of all our customers, and introducing innovative products and services to their benefit.”