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GroFin helps Saboba survive COVID-19 lockdown in Jordan

When the first cases of COVID-19 were detected there in mid-March-2020, Jordan’s government quickly responded by imposing one of the strictest lockdowns in the world. Jordanians were completely confined to their homes for several days and later only allowed to venture out to purchase food and essential items.

Although restrictions were later gradually eased, the impact on Jordan’s economy was severe and small businesses bore the brunt of it. Al-Mutamayeza for Frozen Food Trading, which trades under the name Saboba, is a Jordanian wholesaler distributing high-quality frozen and processed meat and poultry products. The Nomou Jordan Fund has provided Saboba with three rounds of funding from 2014 to 2017. ​

Saboba had to cease production during the period of strict lockdown and could only resume its operations at the end of May. Although its food products could still be sold, the restrictions and their impact on the economy caused a drop of more than 60% in Saboba’s sales and a delay in payments from many of its customers. The lockdown also took effect right at the time Saboba planned to install a new production line and its newly imported equipment was left stuck in customs. ​

​While nearly all activity in the country had ground to a halt, GroFin Jordan reached out to key decision-makers to arrange the release of equipment that were shipped to Saboba’s supplier (partially owned by Saboba’s shareholders) in order to avoid severe delays in setting up the new production line. And further to its business support offering, GroFin Jordan also introduced the client to logistics service providers to help move and install the machinery and assisted the business in obtaining the necessary permits to resume production.

“We managed to get our new machinery, could meet demand, and maintain the brand’s reputation. The company was under the threat of closure. The support offered by GroFin Jordan meant we survived and are back in business”

Raed Mustafa Saboba, owner of the business

Saboba employs 15 people. Salah Ali Hasan Qatam has been working in Saboba’s warehouse since 2008. He supports his wife and five children, aged 13 to 24.

“I am very proud to have this job as it enables me to define my future and that of my family. Working here allows me to save some money for my children. I also hope that I will be able to buy a house instead of paying rent.”

Salah Ali Hasan Qatam, Saboba employee

Jordan SME grows while rebuilding lives of Syrian refugees

Arabella for Aluminium provides employment opportunities to refugees in one of Jordan’s poorest governates.

Former lawyer, Mohamed Darwish, is lucky to have a job on Arabella’s factory floor. Darwish is one of the estimated 1.5 million Syrian refugees presently living in Jordan. His family may have escaped the death and destruction of war when they fled from Aleppo in Syria, but building a new life is not easy.

With close to a third of Jordan’s private sector labour force employed by SMEs, the sector has a crucial role to play in addressing the refugee crisis. And with Arabella located just a few kilometres away from the Zaatari Refugee Camp in the Governate or Irbid, this SME offers a rare employment opportunity at a decent wage to both Syrians and local workers.

Under the Nomou Programme, Arabella is a GroFin Jordan SME client that specialises in aluminum extrusion, fabrication, decoration, and surface treatment & coating. In 2015, GroFin provided the company with financing to purchase equipment and complete infrastructure work at its new production site. But only a few months after it started operations, an unexpected halt in production could easily have seen the business fail.

When cracks appeared in three of the company’s extrusion press containers – which are crucial to its production process – it had no choice but to halt operations. Two of the containers were shipped to Thailand for repairs and while the third was repaired locally, the process still took several months.

Arabella was soon unable to meet its obligations to GroFin and would have defaulted under a traditional financing framework – likely forfeiting its assets and going under. However, GroFin’s model provides room to adapt its financing to the needs of the client and was able to devise an alternative payment plan to allow Arabella to overcome this difficult period.

“Not all business support is about increasing sales and revenue. It is also about helping the client to survive and overcome tough times.”

Wael Sunna, Investment Manager at GroFin Jordan, says small and medium-sized businesses are extremely vulnerable to shocks and the ability to overcome such unexpected setbacks is key to their survival. “Not all business support is about increasing sales and revenue. It is also about helping the client to survive and overcome tough times,” Sunna explains.

GroFin has also provided Arabella with further advice to improve its cash flow through negotiating better payment terms with suppliers and improving collections from clients through shorter payment terms. In 2017, GroFin provided the company with additional funding needed to boost its stock of aluminum pellets to meet higher demand for its products.

With GroFin’s support, Arabella has been able to continuously increase its production and sales. At the end of 2018, the company employed 84 workers, compared to 49 a year before, 20% of whom are Syrians. Arabella continues to grow and is expanding its production facilities even further through the addition of a new furnace for processing scrap aluminum.

“GroFin became our partner when banks refused our loan applications. In the beginning we were short of experience, but we found all the support we needed in GroFin.”

Mr. Sobhi Al Zubi, the entrepreneur behind Arabella, says he will never forget GroFin’s support and loyalty to his business. “GroFin became our partner when banks refused our loan applications. In the beginning we were short of experience, but we found all the support we needed in GroFin. They were there to help us with everything from planning to marketing and sales,” he says.

Sobhi says perseverance and determination were crucial to his success.

“I am always positive, despite the setbacks. I always keep looking forward – never back. You have to feel successful on the inside, then even people who start from nothing can become successful.”

Learn more about the The Nomou Programme and GroFin funding and business support for entrepreneurs and SMEs in the Middle East.

Facing Jordan’s SME challenges & growing in frozen food market

Small and medium-sized businesses employ around a third of Jordan’s private-sector labour force. Yet, World Bank Enterprise Survey data shows that nearly 49% of small and 33% of medium-sized businesses in the country still cite access to finance as a major constraint to their growth.

GroFin allowed Al-Mutamayeza for Frozen Food Trading, which trades under the name Saboba, to overcome this challenge by providing the business with three successive rounds of financing. The company distributes high-quality frozen and processed meat and poultry products. Thanks to GroFin’s investments and continued business support it was able to expand into new geographical regions in Jordan, venture into new market segments and broadened its product range.

Raed and Mohammad Saboba founded the company bearing their name in 2007 in Zarqa, Jordan. They first approached GroFin in 2013 to finance the purchase of additional inventory to expand the distribution network of the business. GroFin also supported Saboba in the formalisation of its business plan and financial projections, equipping the entrepreneurs to monitor progress against the forecasted plan to better identify areas of improvement.

As Saboba grew, GroFin continued to work closely with the business to optimise its product range and pricing, as well as its brand positioning and marketing reach. In 2015, GroFin encouraged Saboba to explore new markets and provided the business with financing to introduce new products targeting hotels, restaurants and catering companies. In response to GroFin’s advice to diversify its product range, Soboba later obtained additional financing to acquire the right to distribute a global brand of powdered milk and other dairy products in Jordan.

Due to the success and improved profitability the company has achieved since partnering with GroFin, Saboba has acquired new premises and its brand is now well-known in Jordan.

“GroFin’s financial and business support resulted in extending our geographical coverage, increasing our number of products from 12 to 25, hiring new employees, and growing sales by over 15% annually,” says Raed Saboba, co-owner of the business.

Saboba currently employs 35 workers, compared to 21 at the time of GroFin’s first investment. However, the company’s growth has not only allowed it to create new job opportunities, but also to enhance the life and careers of its employees. Wafaa Tom is a female employee who joined Saboda in 2016 and heads up the company’s finance department.

“The growth in the company’s operations impacted my knowledge and enriched my career as I am currently dealing with bigger transactions related to a number of reputable customers.”

Alaa Al Faqeer, another female employee at Saboba, says she struggled to find a job with a decent salary as she did not have any tertiary education. All of this changed when a friend encouraged her to apply for a job at Saboba.

“Saboba paid for my tuition to enrol at university and I received a degree in Accounting, which helped me to further develop my career. When I got engaged, Saboba also generously participated in my wedding expenses, as my husband and I could not fulfil all of them,” she says.

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At a mere 14.4%, the World Bank points out that Jordan’s female labour force participation rate is the lowest in the world for a country not at war. This is despite the fact that women comprise more than half of Jordanian university graduates. Gender discrimination in hiring practices contributes to this number, as well as to the country’s high female unemployment rate of nearly 24%. With GroFin’s support, Saboba has empowered Tom and Al Faqeer to overcome these barriers.