liwwa's International Impact

This post was written by Sarah Siddiqui, Research Intern at liwwa, and is based on research she conducted during her internship.

In 2017, liwwa supplied a record amount of funds to small and medium sized enterprises (SMEs)— over $5 million. Since our mission is to create job and income growth, we are interested in how this lending affects economic prospects in the communities we serve. To answer that question, we are actively conducting research to gauge the socioeconomic impact of our loans. In this post, we expand on our prior research by considering the international impact of our lending through the cross-border trade networks in which our borrowers participate. We find that our economic impact is not limited to the markets we lend to directly, but ripples across a wide swath of the world economy.

Extent of our reach

liwwa’s base in Jordan does not restrict our economic influence to Jordan, or even to the Middle East. SMEs typically use liwwa loans to purchase assets or inventory, frequently by importing goods into Jordan from abroad. This spending creates demand in foreign economies, which generates output, income, and employment across the globe. Around 50% of the funding we provide facilitates imports and has impacts on economies beyond Jordan.

liwwa’s borrowers import from countries nearby, such as the UAE and other MENA countries, but more often, they import from more distant regions of the world. 40% of liwwa’s loans fund imports from non-MENA countries, mostly Central Asia and East Asia. Specifically, Turkey, China, Italy, and India stand out. Below is a breakdown of liwwa’s lending by the countries affected through such imports:

Imports by liwwa borrowers

The multiplier effect

Our murabaha model is based on liwwa purchasing assets on behalf of borrowing businesses. These transactions can take the form of inventory, raw materials, or equipment. liwwa pays directly to the supplier, creating income for the supplying business. Eventually, these funds contribute to additional income for suppliers' employees, allowing them to spend more. These levels of spending — liwwa on behalf of borrower, to supplier, to employee— are referred to as the direct, indirect, and induced effects of a loan, or collectively, the multiplier effect.

The magnitude of multipliers vary by:

  • the economic sector that the loan stimulates
  • the size of the area being studied
  • the economic diversity of the region being studied

We see this difference reflected by the corresponding effect. For instance, the oil sector of a Gulf country will have a much higher multiplier than the communications sector of an isolated town. Therefore, each dollar invested into the former economy will have a greater impact than the same dollar invested into the latter.

Here, we use output, value added, income, and employment multipliers to calculate the impact of our lending to SMEs.

Global impact

Having provided approximately $8 million in lending by January 2018, liwwa loans have supported over 830 jobs around the world, generated $3.9 million in income, and boosted economic output by over $27 million across the impacted markets.

60% of liwwa’s funds, totaling $4.8 million, have remained within MENA economies. A significant portion of this figure (15%, or $720,000) go to the UAE and Egypt alone.

International income effect

The vast majority of liwwa’s impact is seen in low- and medium-income countries. 86% of output and 810 of 830 total jobs supported are in lower-income countries. In terms of employment, each dollar spent in these countries has a much higher impact than it would in a high income country: our $1.5 million of funding for imports from high income countries supports approximately 20 jobs, whereas $6.5 million lent to lower-income countries supports 810 jobs - a 1:11 ratio, and an immensely higher return on employment growth. This difference can be accounted for by the lower average worker salary in lower-income countries, resulting in a much higher employment multiplier. In this way, liwwa supports underserved markets by directing funding to lower-income countries, where the employment impact is significantly greater and contributes to the long-term growth of developing economies.

International income effect


It’s well-accepted that SMEs are a vehicle for economic expansion and contribute greatly to a country’s job growth and GDP. Limited access to credit is one of the main barriers for SME development and liwwa addresses this directly. By investing in SMEs, we facilitate interaction between businesses. Our loans go into the creation of goods and services, increasing the GDP, income, and employment opportunities of the economy in which the transaction takes place. In some cases, we contribute to long-term SME growth by helping businesses upgrade technology and equipment, enabling business efficiency that is not measured by the input-output method.

liwwa’s base of investors help create these benefits. The multiplier effect that ripples through SME trade networks as a consequence of these borrower-investor interactions create both economic and social value, over time leading to better living standards for those in its path.


This study utilizes the input-output method developed by Leontief, Jordanian economic multipliers calculated by Osama Al Zoubi, and input-output tables provided by the OECD and sources listed below. Input-output tables track the flow of funds through various sectors of the economy and allow calculation of higher order effects for a given unit of input. The tables and associated data were used to derive Leontief type II economic multipliers for total output, value added, and income, and type I multipliers for employment, specific to each of liwwa’s top performing sectors.


Kuwait Central Statistical Bureau. (2013) National Accounts Statistics Input & Output Tables 2005-2010. Retrieved from
National Accounts Statistics Input & Output Tables 2005-2010. (2013). Retrieved from
OECD, Input-Output Tables.
U.S. Census Bureau. (2017, May 10). North American Industry Classification System (NAICS). Retrieved from

David Asker

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