Government-Backed Loans Program and Its Role in Supporting Small-Scale Farmers in Jordan

The specific relevance and effectiveness of various financing avenues across different farmer groups largely remain unclear. Notably, the evidence on the Agricultural Credit Corporation, widely regarded as the core government-backed organization in Jordan, remains largely narrative. The same applies to any other microfinance institution, if it exists. There is little clarity on the conditions that enable or limit these organizations in effectively serving small-scale farmers. This research explores the financial needs and demands of small-scale farmers based on their agricultural activities. It also examines the impact of government-backed loans on small-scale farmers. Finally, it discusses best practices for lending organizations and highlights the role of government in implementing agricultural lending operations in Jordan.

Based on the information gathered through analysis of relevant literature, comprehensive interviews with recognized experts in the field, and focus group discussions. This case study demonstrates how the Agricultural Credit Corporation has supported and developed the agricultural sector in Jordan.

The Agricultural Credit Corporation has an important role in the agricultural finance sector, expanding its influence and maintaining its commitment to comprehensive agricultural and rural development by providing financing services that meet farmers’ needs efficiently and effectively. Findings show that government agricultural loans have a significant impact on small-scale farmers. The results indicated that higher levels of schooling, greater farming experience, larger landholdings, better transportation access, and more frequent interactions with extension services positively and markedly influence the likelihood of seeking formal financial assistance.

The results indicate that financial support programs, coupled with stronger institutions and better credit access, are crucial to improving rural livelihoods, food security, and sustainable agriculture. Strengthening the agricultural credit system through coherent policies and effective governance could be pivotal for advancing financial inclusion and ensuring the sustainable development of Jordan’s agricultural sector.

Government policies and financial institutions’ lending criteria may change after the study period, potentially affecting the long-term applicability of the findings. This study adds to the body of knowledge on agricultural finance by highlighting the effectiveness and limitations of government-backed loans in a developing economy with semi-arid farming conditions.