Central bank of Jordan (CBJ) has taken a decision to defer debt payments of SMEs until 30/6/2021 to helpSMEs, in your opinion, discuss how this decision will help

By allowing SME's to defer their debt payments to the banks, the SMEs will stand to benefit in many ways.

1. Their Cash flow position will improve will improve significantly. Any shortfall in terms of revenues will not add too much pressure on cash flows since they do not have to pay the interest payments for that time

2. The firm will be able to manage its working capital better despite the shortage of revenues, they can use that money to pay their employees, vendors and any other urgent payments

3. The SMEs will be able to remain solvenet for a longer duration and hence it gives a chance for them to save their businesses.

4. The cash flow pressure on the SME will be reduced which will not negatively impact their credit ratings