Jordanians crowd the branch of a currency-trading company in Irbid. Photo Courtesy: Petra
7iber – September saw the collapse of several currency-trading offices and financial companies dealing with foreign investments, who upon postponing the distribution of their clients’ monthly earnings were seen to be preparing to declare bankruptcy. The move sparked charges from the Amman prosecutor general as a Royal Decree was passed endorsing regulations governing companies dealing in foreign markets.
With thousands of Jordanians as clients, experts estimate that around JD1 billion may be invested in the Kingdom’s various foreign investment firms dealing with the trading of foreign currency. Essentially, clients are told to invest a certain amount of money in exchange for, perhaps, unrealistic returns every month in the form of interest, some going as high as 25% in “guaranteed” profits.
Such companies have operated for years as entities registered and licensed through municipalities or commercial chambers, and have essentially gone unregulated and unmonitored by the Central Bank of Jordan or the Amman Stock Exchange (ASE). A new temporary law has attempted to force these companies to be licensed from the recently established Foreign Exchange Regulatory Commission, with new requirements that include 30% of the firm’s capital being deposited in the Central Bank of Jordan along with a license fee of JD500,000.
Suffice to say, it has been the average Jordanian, lured by the chance to have a much-needed supplementary income who has taken the brunt of September’s unfortunate events. Many citizens have financed their investment by borrowing money from banks, friends and family members. Due to the current legal proceedings, these clients may have to waits months before seeing any sort of financial recovery.
Local Web TV site, Jordan Days, went out to talk with various Jordanians who have been directly affected by the current financial crisis:
Video Courtesy of www.jordandays.tv