April 19, 2018
The Stability Innovation Atlas team, led by FHI 360 and funded by the Rockefeller Foundation, will release their finished product in Spring 2018. The complete Atlas will feature economic stability-enhancing innovations that empower the world’s poor and vulnerable people in managing and investing with confidence in their future. We will be profiling several innovators and innovations that were identified during the research and crowd-sourcing process over the coming weeks and months.
Jordan ranks highly for gender equality in human development indicators such as health and education. Yet women’s participation rates in the formal labor force are among the lowest regionally. Unable to find employment in the formal sector, most women in Jordan run businesses informally from home. However, these home-based businesses (HBBs) have been hindered by zoning restrictions that effectively barred HBBs outside of the Greater Amman Municipality from obtaining business licenses. This limited their ability to access new markets and financial services, as well as substantially reducing Jordan’s tax base.
The USAID Jordan Local Enterprise Support Project (LENS), implemented by FHI 360, began working in 2014 to strengthen the legal status of woman-run HBBs outside of Amman, particularly in underserved communities. The goal was to enable them to grow and invest more in their local communities, and to empower women in economic activity and public- sector decision-making. To this end, LENS conducted a survey of 4,700 businesses, finding that 23% of businesses are informal and operate from home. To the Ministry of Municipal Affairs (MOMA), LENS presented these results along with comparative models of legally-recognized home-based businesses from around the world, a proposal for regularizing HBBs in Jordan, and, later, a study of the economic impact of such regulation. One issue LENS discovered in this process was that the high cost of compulsory social insurance would significantly erode HBB earnings and discourage business registration. LENS then presented these findings to the Social Security Corporation (SSC) and worked to obtain an exemption.
As a result, MOMA amended the Regulations on Buildings and Zoning for Cities and Villages, which allows HBBs to now legally use residential areas for starting and registering their businesses. In August 2017, the SSC also issued HBBs an exemption from compulsory social security contributions. The regulatory changes allow the HBBs throughout the country to formalize more simply and efficiently, granting them legal status and resulting access to markets and services. The project also trained government and municipal agencies involved in the registration and licensing of HBBs on the new legal framework, procured a high-performance database server for the Companies Control Department (CCD) to improve business registration efficiency, and partnered with the CCD and Ministry of Industry, Trade and Supply to publish a startup guide to help MSEs formalize their businesses.
LENS has also been assisting women in a number of other ways, including Informal Savings and Lending Groups manuals to help facilitate women access to finance and a Women’s Economic Empowerment grant targeting women working in non-traditional business sectors—plumbers electricians, and carpenters—with a focus on export potential.
Female HBB owners working in food production have been targeted as a key area of growth. USAID LENS has provided technical assistance to hundreds of HBBs to upgrade food safety standards, product development, production, packaging and transportation, linked HBBs to new markets through the online channels and partnerships with industry groups. LENS also signed an MOU with the supermarket Safeway Jordan to integrate food producers and processors of pickled vegetables and processed dairy products into its supply chains. Through these efforts, the project aims to multiply job opportunities and promote innovation in these communities in a way that is inclusive of women, youth, and other vulnerable populations.