Classic Fashion required debt financing in order to expand its capacity. However its lender Standard Chartered Bank (SCB) faced single borrower limits.
UNCHR reports that at end of 2019 655,000 registered Syrian refugees lived in Jordan; an additional 30,000 returned home from Jordan in the year and up to 5,000 moved to a third country. 165,000 Syrian refugees have been issued work permits and can potentially contribute to the Jordan economy. Many of these Syrian refugees have been forced to work in the informal sector, without labour protections (Human Rights Watch, 2018). The government of Jordan need support to integrate these refugees and reach the refugee quota.
GuarantCo has provided 100% credit guarantee to SCB who provided a
5-year $42.5m corporate loan to Classic Fashion.
The funds will be used to build a fabric mill, a centralised cutting facility, a carton and bag factory and a laundry unit, all of which will cater for increased demand.
Classic Fashion provides staff free meals and accommodation, a high standard of HSES at workplace and training centres. During the current COVID crisis the factory can keep operating due to the workforce being on site and special safety measures adopted with PIDG TA support. The factory has partly temporarily reconverted to protective equipment for health workers due to global demand.
Impact – Empowering Women
GuarantCo and PIDG worked with the company to assess and improve the impact on women, as part of the wider support to train, employ and develop skills for Jordanian, Syrian, and migrant workers.
Applying a gender lens to the investment meant looking at areas like governance, workforce, products, supply chain and community to identify the most significant ways to improve outcomes for women. We identified the following measures as the most promising.
Women in the community:
Technical Assistance funding will be used to expand operations of the training centre, in order to improve capacity to provide training and employable skills. Each cohort aims for 80% female and 20% male graduates, with 10% reserved for people with disabilities.
To improve the centre’s accessibility for female and refugee participants, trainees are fully compensated by CFAI throughout the programme. The centre employs female trainers who also act as mentors. Gender-based violence and harassment (GBVH) training is also conducted to raise awareness and support trainees.
Women in the workforce:
GuarantCo’s support will facilitate CFAI employing 1,000, to be expected mostly female refugees, within three years. After graduating from the programme, trainees are encouraged alongside Jordanians and existing groups of migrant workers, to seek employment at CFAI. Such an opportunity effectively lowers workforce entry barriers for women and particularly female refugees.