Concentration and Market Structure Analysis in Jordanian Microfinance Industry: Using the SCP Approach

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Alomari, Nahil Saqfalhait This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8080485/v1 This work is licensed under a CC BY 4.0 License Status: Published Journal Publication published 16 Mar, 2026 Read the published version in Discover Sustainability → Version 1 posted 15 You are reading this latest preprint version Abstract The scope of our study is to investigate the concentration levels and analyze the market structure of Jordan’s microfinance sector. Utilizing the gross loan portfolio as a measurement of credit market share, this study constructs the Structure Conduct Performance SCP approach measured by the Herfindahl-Hirschman Index HHI technique, and the Concentration Ratios CRs. The results of the HHI reveal that the Jordanian microfinance sector was moderately concentrated, with average HHI values ranging from 18 to 19 percent from 2009 to 2015. However, it has recently transitioned to become highly concentrated, with the HHI reaching 25 percent in 2018. However, based on the CR, the largest two and four MFIs dominate the industry, accounting for more than 60 percent and 90 percent, respectively. Our findings will enhance the vision of the Jordanian microfinance industry structure and provide recommendations to policymakers and practitioners. JEL Classification: D4, L1, G2. Microfinance Market structure Concentration and Structure-Conduct-Performance (SCP) approach Figures Figure 1 1. Introduction The structure of an industry can determine the nature and shape of markets, as well as the existence of monopolistic or competitive factors in any market (Baumol, 1982 ). Although the basic characteristics of market structure may influence firm performance and behavior, the level of industrial concentration is considered one of the most important factors affecting market structure (Abdullah and Abdul Jalil, 2006). The emergence of microfinance was to provide financial services, including loans, savings, and insurance, to low-income individuals and small businesses. Microfinance may be considered one of the vital tools in financial inclusion, compared to traditional loans, as MFIs introduce small loans with more flexible repayment terms. Therefore, it provides more opportunities for individuals who have faced barriers or exclusion from financial services. Although the gap in access to microfinance in developing countries is significant — with about 40 percent of adults having access to formal financial services, as reported by the World Bank ( 2021 ) — microfinance remains crucial for promoting economic growth and reducing poverty in these nations. In the context of Jordan as a developing country, 15.7 percent of Jordanians were living below the country's poverty line according to 2023 World Bank statistics. Given this high poverty rate, Microfinance tools can help Jordanian people to improve their livelihoods and escape poverty by enabling most of them to start and grow businesses directly, promote job creation, and boost economic growth. Additionally, microfinance products can promote financial inclusion and reduce income inequality. Consequently, the Jordanian government recognized the vital role of microfinance. Thus, in 2008, it founded the Jordan Microfinance Network, called Tanmeyah, to enhance the development of Jordan's microfinance sector. Unlike traditional microfinance institutions, Tanmeyah offers a range of support services to MFIs, including capacity building, technical assistance, and support. The microfinance sector in Jordan is regulated by the Central Bank of Jordan CBJ, which has implemented several regulations to promote the development of the microfinance industry. The CBJ regularly inspects MFIs to ensure they follow the rules and conditions. The microfinance sector primarily comprises commercial, government-owned, and NGO MFIs. Although Jordan's microfinance sector is well organized, it still faces significant challenges on both micro and macro levels. In the micro (institutions) level, MFIs often face difficulties in securing funding from traditional financial institutions, which can hinder their growth and expansion. Additionally, MFIs are usually more expensive compared with traditional Banks, whereas charging higher interest rates will make microloans harder for borrowers to repay, and raise the risk of over-indebtedness. Moreover, regulatory requirements can be complex and expensive to meet for small and medium-sized microfinance institutions, posing a significant challenge to their survival. At the macroeconomic level, recent economic challenges in Jordan, including high unemployment and inflation, have intensified repayment difficulties for borrowers. Note that many borrowers in Jordan possess low financial literacy, which hinders their understanding of loan terms and their ability to manage their finances effectively. This study argues that Jordan's microfinance sector remains promising for growth and development. Given the increasing demand for financial services among low-income individuals and emerging microenterprises, the sector has a significant opportunity to expand its reach and impact in the years to come. Moreover, rapid advancements in financial technology can help microfinance institutions lower costs, improve efficiency, and expand their borrower base. Referring to the World Bank’s MIX database and the Jordanian Microfinance Network, Tanmeyah, the research problem arose from the observation that the microfinance sector in Jordan is highly fragmented, with nine active MFIs. At the same time, the leading few institutions dominate the majority of the market share. Therefore, this may result in a highly concentrated industry, raising concerns about limited competition and innovation. Moreover, it may pose barriers for new MFIs attempting to enter the market and restrict the sector’s growth and its functions. Accordingly, this study intends to analyze the market structure changes in Jordan’s microfinance sector and provide valuable suggestions to policymakers, practitioners, and management of the MFIs. The challenge facing this study is the limited availability of data, up to 2018, on the nine microfinance institutions listed in the World Bank’s MIX database and the Jordanian Microfinance Network. Therefore, the study focused on the 7 out of 9 institutions that provided more comprehensive data. This paper is organized as follows. Section 2 discusses the most related literature. Section 3 presents measures of market concentration, including data, methodology, and empirical findings. Section 4 concludes the paper. This study provides new insights into the structure and dynamics of the microfinance market in Jordan. 2. Literature review The economic literature states that well-functioning markets are associated with competition, where competitive markets promote productive and allocative efficiency, increase social welfare, protect consumers, and facilitate the development of new product designs. Accordingly, the Consultative Group to Assist the Poor ( 2001 ) explained that the microfinance market in Latin America is witnessing rising competition, which may lead to market saturation in other countries. Navajas et al. ( 2003 ) analyzed the market structure of microfinance in Bolivia by focusing on two major MFIs, which collectively have a 40 percent market share. The study suggests that the outcome of competition is indeterminate, as competition leads to innovation and an expansion of outreach. Mclntosh and Wydick (2005) explained the positive impact of competition between MFIs on information asymmetry. As a result of increasing competition, the information sharing between MFIs may be challenging, and borrowers may engage in multiple borrowing, which in turn can make borrowers worse off with a single lender. Hermes et al. ( 2009 ) examined the relationship between financial development and competition of MFIs in terms of efficiency. Their results revealed that financial development could positively affect the efficiency and competition of MFIs. In recent studies investigating the microfinance market structure, researchers employed both structural and non-structural techniques. Uddin and Gupta ( 2012 ) addressed the market structure of the non-banking sector in Bangladesh and its change over time by adopting both discrete and cumulative measures of concentration and competition based on the SCP approach for assessing the competition during the period 1997–2010. The study expresses differences between discrete (CRk) and cumulative (HHI, CCI, and HTI) measures in that the CRk considers the market share of the largest k institutions only, whereas the HHI considers the market share of all institutions operating in the market. The findings indicate that the market was highly concentrated in 1997. However, over the years, there has been a significant decrease in concentration levels, suggesting that competition has increased throughout the sample period. Assefa et al. ( 2013 ) analyzed the market structure of the microfinance industry by using the Lerner index as a non-structural measurement and spanning 73 countries, consisting of 362 MFIs from 1995 to 2008. The study concluded that during the later period, more competition was associated with a large number of emerging MFIs and rapid expansion in MFIs’ branches. Kar and Swain ( 2014 ) support the findings of Assefa et al. ( 2013 ) by examining the HHI as a structural measure to analyze the microfinance industry structure of 71 countries, categorized into subsamples according to their geographical location, between 2003 and 2008. They discovered that the worldwide microfinance industry was moderately concentrated, with an average HHI value of 0.372. Kar ( 2016 ) examined the microfinance competition using a non-structural measurement called the Boone technique (developed by Boone ( 2008 )). Ten countries were included, comprising 521 MFIs, from 2002 to 2008. The findings revealed that two countries witnessed a decline in competition due to the partial reconstruction of market power in the MFI industry. While the others maintained relatively fixed levels of competition during the study horizon. Mia ( 2018 ) analyzed the market structure and concentration in the microfinance industry in Bangladesh. The sample consisted of 169 MFIs during the period 2009–2014. The study examined the structural measurements, including the HHI and CRs, of the largest 3, 8, and 20 MFIs, as well as the Lerner index, a non-structural measurement. The results of HHI indicate that the sector concentration was moderate and, in the later stages, transitioned into an unconcentrated market. The CRs' values revealed the dominance of the industry by a few large MFIs. However, based on the Lerner index, the competition levels were relatively high. Navin and Sinha ( 2019 ) evaluated the concentration and competition degree of the Indian microfinance sector using the HHI and the CRs of the largest 5 and 10 Indian MFIs during the period 2005–2017, based on an illustrative sample that includes firm-specific data from 127 MFIs of different legal statuses and sizes. The study analyzed the performance of leading MFIs to explore whether there is evidence of client abuse or market power practices by these institutions. The findings revealed a high concentration associated with lower competition levels over the later years. However, the study failed to find evidence regarding any attempts by the leading MFIs to utilize their market dominance to influence behavior. In the context of drivers of higher market concentration, Affeldt et al. ( 2021 ) examined whether efficiency, as a beneficial factor, or greater market power, as a harmful factor, drives increasing market concentration. The findings revealed that both patterns exist across various markets. The idea that concentration is driven by efficiency is supported by results related to intangible investments, which indicate the presence of scalability effects. Azar et al. ( 2022 ) noted that the HHI is commonly used as a measure of market concentration in both the industrial organization literature and practice. It is a simple and easy-to-calculate measure that can be used to assess the level of concentration in any market, regardless of the industry. 3. Measuring market concentration Based on the literature, the market structure, as per the SCP approach, can be evaluated using the HHI, CR k of the largest k th institutions in the sector, and the number of firms in the industry. The central premise of the SCP approach is that high market concentration, resulting from the dominance of only a few firms, directly causes less competitive behavior and, consequently, lower industry performance (e.g., higher profits). (Brewer and Jackson, 2004 ; Van et al., 2011). However, since the CR is based solely on the market share of the most prominent firms, it does not provide a complete view of the market, as it overlooks smaller institutions (Mia, 2018 ). Moreover, the CR is inadequate because it merely indicates the level of concentration, without providing enough information regarding the firm’s distribution (Bikker and Haaf, 2002b ). Thus, the firm’s number may not be a reliable indicator of concentration and competition (Mia, 2018 ); instead, we should examine the potential number of entrants (Stiglitz et al., 1987 ). HHI is considered one of the most significant techniques used to analyze competition compared to other market concentration measurements (Laine, 1995 ). This measure is the most commonly used summary of concentration in theoretical studies and is frequently used as a benchmark for comparing other concentration measures. (Bikker and Haaf, 2002a ). According to Calkins ( 1983 ), HHI has three important properties. First, it reflects the shares of every firm in the market. Second, the HHI is lowest when market shares are equal and highest when one firm has a substantial market share. Third, any value of the HHI can be interpreted as a number equivalent, which simplifies the interpretation of the results. However, Bikker and Haaf ( 2002a ) note that SCP approaches usually link competition to concentration. A market with a high level of concentration is usually associated with a lower level of competition and vice versa (Uddin and Gupta, 2012 ). 3.1. Data and Methodology The data for this study were obtained from the World Bank Microfinance Information Exchange (MIX) database and the members’ performance reports of the MFIs in Jordan issued by the Jordanian Microfinance Network (Tanmeyah). The data span the period 2009 to 2018, comprising a sample of seven MFIs out of nine listed in both the MIX database and the Jordan Microfinance Network for the same period, based on data availability 1 . To analyze the concentration level in the Jordanian microfinance sector, this study uses both the distinct CRk and the cumulative HHI measures, which are the most commonly employed indices (Bikker and Haaf, 2002a ). To understand how a few MFIs might control the microfinance industry, this study uses the concentration ratios CR2 and CR4, which represent the two largest and four largest Jordanian MFIs. The CRk is calculated using the following formula: $$\:{CR}_{k}=\:\sum\:_{i=1}^{k}{MS}_{i}$$ 1 Where MSi is the largest market share among the ith market (two and four) MFIs, and k is the number of the largest MFIs. Note that CRk does not count all MFIs operating in an industry in a specific year. CR is a one-dimensional measure that ranges from 0 to 1 (or 0 to 100% if expressed as a percentage). The index approaches zero when the kth institutions used in calculating the CR have equal MS, indicating a market with minimal concentration or maximum competition. Conversely, it approaches one if the kth institutions are concentrated (Bikker and Haaf, 2002a ). Most of the MFI literature uses assets and/or loans as proxies for the MS (Uddin and Gupta, 2012 ). However, most banking research relies on total assets as the primary measure of a bank's relative size (Mia, 2018 ). Therefore, this study adopts gross loan portfolio (GLP) to calculate MS using the following formula. $$\:{MS}_{i}=\frac{{GLP}_{i}}{\sum\:_{i}^{n}{GLP}_{i}}$$ 2 Where GLPi is the loan indicator of the ith institution operating in the microfinance sector during a specific year, and n represents the total number of MFIs active in the sector. To understand how all MFIs operate in the microfinance sector, this study employs the HHI, which is calculated as the sum of the squared market shares for all MFIs operating in the sector. The mathematical formula for calculating the HHI is defined as: $$\:HHI=\:\sum\:_{i=1}^{n}{MS}_{i}^{2}$$ 3 The primary method of calculating an individual firm's market share (MSi) is indeed the same for both the HHI and CRk. Referring to the Horizontal Merger Guidelines issued by the U.S. Department of Justice and the Federal Trade Commission (DOJFTC), values of HHI below 15 percent are considered un-concentrated, values between 15 and 25 percent are moderately concentrated, and values above 25 percent are highly concentrated (Calkins, 1983 ; Claudia, 2012 ). While an accurate calculation of the HHI requires including the market share of every firm in the relevant market, excluding tiny firms usually does not significantly alter the final HHI value (Claudia, 2012 ). 4. Empirical Results and Discussion In the microfinance industry in Jordan, concentration measurements were conducted for the listed MFIs in the World Bank's database of microfinance information exchange MIX during the specific years 2009, 2012, 2015, and 2018. These measurements showed that 7 out of 9 institutions in the Jordanian microfinance market were included. The concentration was calculated based on each institution's gross loan portfolio using the previously mentioned concentration indicators: CR2, CR4, and HHI. Table 1 shows the gross loan portfolio of the seven Jordanian MFIs included in this study. The total gross loan portfolio steadily grew from approximately $ 75.03 million to $ 249.4 million between 2009 and 2018. Table 1 MFI’s Gross Loan Portfolio (USD) Gross Loan Portfolio No. Firm 2009 2012 2015 2018 1 National Microfinance Bank (NMB) 13,646,082 21,319,042 28,715,434 40,008,000 2 Ahli Microfinance Company (AMC) 5,132,590 9,240,751 16,567,300 NA 3 FINCA - JOR 3,626,058 7,610,301 16,442,038 NA 4 Microfund for Women (MFW) 17,100,338 36,187,992 67,830,296 86,455,111 5 Tamweelcom 13,218,348 31,476,506 48,024,976 67,282,268 6 UNRWA- JOR 4,990,030 6,824,860 9,677,216 10,358,060 7 Vitas JOR 17,311,961 26,017,168 42,841,704 45,299,838 Total 75,025,407 138,676,620 230,098,964 249,403,277 Source: World Bank's database of microfinance information exchange MIX during the years 2009, 2012, 2015, and 2018 The market share of MFIs was calculated using Eq. 2 . Our results in Table 2 show that Vitas JOR had the highest market share of 23.1 percent in 2009, while Microfund for Women (MFW) had the highest market shares of 26.1%, 29.5%, and 34.7% in 2012, 2015, and 2018, respectively. Table 2 MFI’s Market Share Market Share (MS) No. Firm 2009 2012 2015 2018 1 National Microfinance Bank (NMB) 0.182 0.154 0.125 0.160 2 Ahli Microfinance Company (AMC) 0.068 0.067 0.072 NA 3 FINCA - JOR 0.048 0.055 0.071 NA 4 Microfund for Women (MFW) 0.228 0.261 0.295 0.347 5 Tamweelcom 0.176 0.227 0.209 0.270 6 UNRWA- JOR 0.067 0.049 0.042 0.042 7 Vitas JOR 0.231 0.188 0.186 0.182 Total 1 1 1 1 Source: Prepared by the authors based on Eq. 2 . To examine how a few MFIs may dominate the microfinance industry, this study chose to use the concentration ratios CR2 and CR4 of the two largest and four largest Jordanian MFIs. The CRk is calculated using Eq. 1 , and the results are shown in Table 3 . Table 3 Concentration Ratios of MFIs Concentration Ratio 2009 2012 2015 2018 CR 2 0.459 0.488 0.504 0.617 CR 4 0.817 0.830 0.815 0.959 Source: Prepared by the authors based on Eq. 1 . In 2009, the CR of the largest two institutions (Vitas JOR and Microfund for Women (MFW)) was about 45.9 percent, while the CR of the largest four institutions (Vitas JOR, Microfund for Women (MFW), National Microfinance Bank (NMB), and Tamweelcom) was about 81.7 percent. In 2012, the two largest institutions were Microfund for Women (MFW) and Tamweelcom, with a concentration of 48.8 percent. This was similar to the situation in 2009, when the largest four institutions had a concentration of about 83 percent. In 2015, the two largest institutions remained unchanged from 2012, with a concentration of 50.4 percent. The largest four institutions, as of 2009 and 2012, had a concentration of 81.5 percent. The CRs in 2018 were similar to those in previous years for the most prominent two and four institutions, with concentrations of 61.7% and 95.9%, respectively. Therefore, based on CRs, the Microfinance sector remains highly concentrated, with a handful of large institutions controlling the market, which reveals that a limited number of large-scale MFIs control the market. Furthermore, to derive more general criteria about the concentration of MFIs, this study presents concentration curves. These curves are determined by the cumulative percentage of the industry's size, expressed as the sum of the market shares of the institutions, on the vertical axis, and the cumulative number of institutions, arranged from the largest to the smallest, on the horizontal axis. The concentration curves of the Jordanian MFIs are presented in Table 4 and Fig. 1 . Table 4 MFIs’ Concentration ratios in years 2009, 2012, 2015, and 2018 Cumulative Number of MFIs From Largest to Smallest Concentration in 2009 Concentration in 2012 Concentration in 2015 Concentration in 2018 0 0.00 0.00 0.00 0.00 1 0.23 0.26 0.29 0.35 2 0.46 0.49 0.50 0.62 3 0.64 0.68 0.69 0.80 4 0.82 0.83 0.81 0.96 5 0.89 0.90 0.89 1.00 6 0.95 0.95 0.96 1.00 7 1.00 1.00 1.00 1.00 Figure 1 shows that the concentration ratio (CR4) increased gradually from 2009 to 2015 and reported a significant rise between 2015 and 2018. This indicates that the four largest MFIs have become increasingly dominant in the Jordanian microfinance sector. Regarding the HHI index, it can be calculated, as previously mentioned in Eq. 3 , by summing the squares of the market shares of the Jordanian MFIs. The results of the HHI are displayed in Table 5 . Table 5 Herfindahl–Hirschman Index (HHI) results Squared Market Share (MS 2 ) No. MFIs 2009 2012 2015 2018 1 National Microfinance Bank (NMB) 0.033 0.024 0.016 0.026 2 Ahli Microfinance Company (AMC) 0.005 0.004 0.005 NA 3 FINCA - JOR 0.002 0.003 0.005 NA 4 Microfund for Women (MFW) 0.052 0.068 0.087 0.120 5 Tamweelcom 0.031 0.052 0.044 0.073 6 UNRWA- JOR 0.004 0.002 0.002 0.002 7 Vitas JOR 0.053 0.024 0.035 0.033 HI 0.181 0.188 0.193 0.253 Source: Prepared by the authors based on Eq. 3 . The HHI results in Table 5 indicate that the industrial concentration of Jordanian MFIs increased gradually from 18.1 percent in 2009 to 25.3 percent in 2018, which is consistent with the concentration ratios. However, the HHI computation reveals that the microfinance industry is moderately concentrated as the HHIs were around 18 percent to 19 percent during the years 2009, 2012, and 2015, respectively. Recently, in 2018, it transitioned to a highly concentrated sector, with the HHI reaching 25 percent. Such a finding is important because it suggests that the industry is still evolving. This in turn reveals that there is still an opportunity for new MFIs to enter the sector, and for existing MFIs to grow and expand. This rise in concentration can be explained by two possible reasons. First, the MFIs in Jordan are still young and growing, and it is normal to observe that some of the MFIs are growing larger than the others. The second reason may be that Jordanian governmental regulations have served the larger MFIs better, as they are more effective in managing risks compared to emerging institutions, and can provide a broader range of services to their clients. In addition, larger MFIs may be able to offer more competitive interest rates and fees, and they have more ability to innovate and develop new products and services. On the other hand, higher concentration for a few of the largest institutions may influence the competition, resulting in higher prices for consumers and less consumer surplus. It is also important to note that larger MFIs may be more vulnerable to systemic risk. Thus, the policymakers and other stakeholders should carefully monitor the situation in the microfinance sector and take steps to mitigate the potential drawbacks of increased concentration. For example, the CBJ and government regulation have the option to stimulate the establishment of new MFIs and actively foster competition within the sector by providing the required support and facilities for new and emerging institutions. Furthermore, the government could work to strengthen the regulatory framework for the microfinance sector, ensuring that consumers are adequately protected from the practices and market power of large institutions. Furthermore, policymakers should establish a stable macroeconomic and business environment that facilitates the operations and expansion of MFIs, as well as a well-developed financial infrastructure to sustain the development of microfinance. These findings may contribute to the existing literature by providing empirical evidence regarding the evolution of market structure in Jordan’s microfinance sector, as it is becoming increasingly concentrated. These crucial findings provide significant implications for practitioners as well. the finding of higher concentration associated with lower competition highlights awareness needs among practitioners regarding the greater competitive pressure from dominant MFIs. Thus, practitioners can respond to this challenge by seeking new products and services, diversifying their portfolios, and improving their operational efficiency. 5. Conclusion The microfinance industry in Jordan is a key player in the country's financial system. Specifically, it is a vibrant and growing sector that plays a crucial role in providing access to financial services for low-income individuals and small businesses, including microenterprises. The industry has also helped to create jobs and improve the living standards of low-income households. The industry has experienced significant growth in recent years and is expected to continue growing in the years to come, provided it receives effective regulation and guidance. However, our empirical results show that the Jordanian microfinance sector has recently transitioned into a highly concentrated sector, with a smaller number of MFIs still dominating the industry. According to HHI, Jordan's microfinance sector was moderately concentrated in 2009, 2012, and 2015, respectively. Recently, it has evolved into a highly concentrated sector. Furthermore, the two and four largest MFIs account for over 60 percent and 90 percent, respectively, of the total market share, indicating that the few largest MFIs have become increasingly dominant in the Jordanian microfinance sector. This would lead to a reduction in competitive behavior and industry performance. In contrast, this high degree of concentration is a concern, as it could lead to a lack of innovation in the industry and make it more difficult for new entrants to enter the market. By understanding the structure of the microfinance market, policymakers can develop more effective policies to support the sector's growth and development. Practitioners can also utilize these findings to develop more effective business strategies and compete more competitively in the Jordanian microfinance market. Overall, the results of this study add valuable insights to our understanding of the microfinance industry in Jordan. These findings can inform policymakers and practitioners in making informed decisions about supporting the industry's development and protecting consumer interests. Declarations The authors confirm that there are no known conflicts of interest related to this publication. Additionally, the clinical trial number, the sections on Ethics, Consent to Participate, and Consent to Publish are not applicable. Declaration of Funding The authors declare that no funding, financial support, or specific grant was received from any funding agency, commercial entity, or not-for-profit organization to conduct the research, analyze the data, or prepare the manuscript. Author Contribution Mohammad W. Alomari wrote the main manuscript text and analysis. Nahil Saqfalhait finalized and coordinate the manuscript. All authors reviewed the manuscript. 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Footnotes Following Bansah and Adjei (2023), the data on microfinance institutions listed in the World Bank database (MIX) are available until the year 2018, after which there is not any reported data within the MIX database regarding MFIs. Additional Declarations No competing interests reported. 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Alomari","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAAz0lEQVRIiWNgGAWjYFACHjDJ2MDeA6KZgfgAsVp4zpCsRSIHpoUA0G3vPfjpZo6d7Iabb49JMFRYJzYwHsZvjdmZc8nSuduSjTfczkuTYDiTntjAcCwBv5YbOQZALcyJ227nmEkwth0GajljQEiL8e/cbfWJ226eAWr5R5wWM6AthxO33eABamkgRsuZM2bWuduOG+8/k2NskXAs3biNoF+O9xjfzt1WLTuz/YzhjQ811rL9EgRCDBWAjGeTIEUHBPA3kKxlFIyCUTAKhjcAADh9TdAKhzYcAAAAAElFTkSuQmCC","orcid":"","institution":"Hashemite University","correspondingAuthor":true,"prefix":"","firstName":"Mohammad","middleName":"W.","lastName":"Alomari","suffix":""},{"id":551361881,"identity":"df74a86a-e28f-4498-97af-4fec2732f7f3","order_by":1,"name":"Nahil Saqfalhait","email":"","orcid":"","institution":"University of Jordan","correspondingAuthor":false,"prefix":"","firstName":"Nahil","middleName":"","lastName":"Saqfalhait","suffix":""}],"badges":[],"createdAt":"2025-11-10 20:53:09","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-8080485/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8080485/v1","draftVersion":[],"editorialEvents":[{"content":"https://doi.org/10.1007/s43621-026-02936-0","type":"published","date":"2026-03-16T15:57:59+00:00"}],"editorialNote":"","failedWorkflow":false,"files":[{"id":96943683,"identity":"dc1cc374-e422-4cdd-b9fc-743d4d28fbdc","added_by":"auto","created_at":"2025-11-27 18:56:07","extension":"docx","order_by":0,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":63013,"visible":true,"origin":"","legend":"","description":"","filename":"ConcentrationandMarketStructurewithauthors.docx","url":"https://assets-eu.researchsquare.com/files/rs-8080485/v1/7ce917430fbeb21f4be5ffe5.docx"},{"id":96943682,"identity":"dc5f28ba-4591-42a3-a0c9-78052029865e","added_by":"auto","created_at":"2025-11-27 18:56:07","extension":"json","order_by":1,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":3731,"visible":true,"origin":"","legend":"","description":"","filename":"7802ad65a8f84bb086de07800e088b02.json","url":"https://assets-eu.researchsquare.com/files/rs-8080485/v1/dba8a53d95814df053bd44ad.json"},{"id":96943685,"identity":"aca638a7-9a43-4946-9863-1aab5e5f5a75","added_by":"auto","created_at":"2025-11-27 18:56:07","extension":"xml","order_by":2,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":81459,"visible":true,"origin":"","legend":"","description":"","filename":"7802ad65a8f84bb086de07800e088b021enriched.xml","url":"https://assets-eu.researchsquare.com/files/rs-8080485/v1/748e549fef5fc76fecfb63ba.xml"},{"id":96943684,"identity":"55376d3a-06f1-4b7d-ba7e-4055741831c6","added_by":"auto","created_at":"2025-11-27 18:56:07","extension":"xml","order_by":4,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":80742,"visible":true,"origin":"","legend":"","description":"","filename":"7802ad65a8f84bb086de07800e088b021structuring.xml","url":"https://assets-eu.researchsquare.com/files/rs-8080485/v1/50429bc857ba8857c73c358f.xml"},{"id":96943686,"identity":"10d44892-eecc-4267-91f0-dc9f08320a7f","added_by":"auto","created_at":"2025-11-27 18:56:08","extension":"html","order_by":5,"title":"","display":"","copyAsset":false,"role":"acdc-reference","size":85611,"visible":true,"origin":"","legend":"","description":"","filename":"earlyproof.html","url":"https://assets-eu.researchsquare.com/files/rs-8080485/v1/e38eb1e88bdb04e55afc6380.html"},{"id":96943681,"identity":"e4a1b043-c9fb-44fc-8319-2fd0ad6cbb3a","added_by":"auto","created_at":"2025-11-27 18:56:07","extension":"jpg","order_by":1,"title":"Figure 1","display":"","copyAsset":false,"role":"figure","size":209421,"visible":true,"origin":"","legend":"\u003cp\u003e\u003cstrong\u003eMFIs’ Concentration Curves in years 2009, 2012, 2015, and 2018\u003c/strong\u003e\u003c/p\u003e","description":"","filename":"Picture1.jpg","url":"https://assets-eu.researchsquare.com/files/rs-8080485/v1/1feab03d07d2d1d9c4d83dc1.jpg"},{"id":105223693,"identity":"abd8bae4-dc78-4d80-a324-b2f707e988d5","added_by":"auto","created_at":"2026-03-23 16:09:08","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":947566,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8080485/v1/e6b157f6-5bcf-4c58-b78b-4dc9fd113c71.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Concentration and Market Structure Analysis in Jordanian Microfinance Industry: Using the SCP Approach","fulltext":[{"header":"1. Introduction","content":"\u003cp\u003eThe structure of an industry can determine the nature and shape of markets, as well as the existence of monopolistic or competitive factors in any market (Baumol, \u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e1982\u003c/span\u003e). Although the basic characteristics of market structure may influence firm performance and behavior, the level of industrial concentration is considered one of the most important factors affecting market structure (Abdullah and Abdul Jalil, 2006).\u003c/p\u003e\u003cp\u003eThe emergence of microfinance was to provide financial services, including loans, savings, and insurance, to low-income individuals and small businesses. Microfinance may be considered one of the vital tools in financial inclusion, compared to traditional loans, as MFIs introduce small loans with more flexible repayment terms. Therefore, it provides more opportunities for individuals who have faced barriers or exclusion from financial services. Although the gap in access to microfinance in developing countries is significant \u0026mdash; with about 40 percent of adults having access to formal financial services, as reported by the World Bank (\u003cspan citationid=\"CR24\" class=\"CitationRef\"\u003e2021\u003c/span\u003e) \u0026mdash; microfinance remains crucial for promoting economic growth and reducing poverty in these nations.\u003c/p\u003e\u003cp\u003eIn the context of Jordan as a developing country, 15.7 percent of Jordanians were living below the country's poverty line according to 2023 World Bank statistics. Given this high poverty rate, Microfinance tools can help Jordanian people to improve their livelihoods and escape poverty by enabling most of them to start and grow businesses directly, promote job creation, and boost economic growth. Additionally, microfinance products can promote financial inclusion and reduce income inequality. Consequently, the Jordanian government recognized the vital role of microfinance. Thus, in 2008, it founded the Jordan Microfinance Network, called Tanmeyah, to enhance the development of Jordan's microfinance sector. Unlike traditional microfinance institutions, Tanmeyah offers a range of support services to MFIs, including capacity building, technical assistance, and support.\u003c/p\u003e\u003cp\u003eThe microfinance sector in Jordan is regulated by the Central Bank of Jordan CBJ, which has implemented several regulations to promote the development of the microfinance industry. The CBJ regularly inspects MFIs to ensure they follow the rules and conditions. The microfinance sector primarily comprises commercial, government-owned, and NGO MFIs. Although Jordan's microfinance sector is well organized, it still faces significant challenges on both micro and macro levels. In the micro (institutions) level, MFIs often face difficulties in securing funding from traditional financial institutions, which can hinder their growth and expansion. Additionally, MFIs are usually more expensive compared with traditional Banks, whereas charging higher interest rates will make microloans harder for borrowers to repay, and raise the risk of over-indebtedness. Moreover, regulatory requirements can be complex and expensive to meet for small and medium-sized microfinance institutions, posing a significant challenge to their survival. At the macroeconomic level, recent economic challenges in Jordan, including high unemployment and inflation, have intensified repayment difficulties for borrowers. Note that many borrowers in Jordan possess low financial literacy, which hinders their understanding of loan terms and their ability to manage their finances effectively.\u003c/p\u003e\u003cp\u003eThis study argues that Jordan's microfinance sector remains promising for growth and development. Given the increasing demand for financial services among low-income individuals and emerging microenterprises, the sector has a significant opportunity to expand its reach and impact in the years to come. Moreover, rapid advancements in financial technology can help microfinance institutions lower costs, improve efficiency, and expand their borrower base.\u003c/p\u003e\u003cp\u003eReferring to the World Bank\u0026rsquo;s MIX database and the Jordanian Microfinance Network, Tanmeyah, the research problem arose from the observation that the microfinance sector in Jordan is highly fragmented, with nine active MFIs. At the same time, the leading few institutions dominate the majority of the market share. Therefore, this may result in a highly concentrated industry, raising concerns about limited competition and innovation. Moreover, it may pose barriers for new MFIs attempting to enter the market and restrict the sector\u0026rsquo;s growth and its functions. Accordingly, this study intends to analyze the market structure changes in Jordan\u0026rsquo;s microfinance sector and provide valuable suggestions to policymakers, practitioners, and management of the MFIs. The challenge facing this study is the limited availability of data, up to 2018, on the nine microfinance institutions listed in the World Bank\u0026rsquo;s MIX database and the Jordanian Microfinance Network. Therefore, the study focused on the 7 out of 9 institutions that provided more comprehensive data.\u003c/p\u003e\u003cp\u003eThis paper is organized as follows. Section 2 discusses the most related literature. Section 3 presents measures of market concentration, including data, methodology, and empirical findings. Section 4 concludes the paper. This study provides new insights into the structure and dynamics of the microfinance market in Jordan.\u003c/p\u003e"},{"header":"2. Literature review","content":"\u003cp\u003eThe economic literature states that well-functioning markets are associated with competition, where competitive markets promote productive and allocative efficiency, increase social welfare, protect consumers, and facilitate the development of new product designs. Accordingly, the Consultative Group to Assist the Poor (\u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e2001\u003c/span\u003e) explained that the microfinance market in Latin America is witnessing rising competition, which may lead to market saturation in other countries. Navajas et al. (\u003cspan citationid=\"CR19\" class=\"CitationRef\"\u003e2003\u003c/span\u003e) analyzed the market structure of microfinance in Bolivia by focusing on two major MFIs, which collectively have a 40 percent market share. The study suggests that the outcome of competition is indeterminate, as competition leads to innovation and an expansion of outreach. Mclntosh and Wydick (2005) explained the positive impact of competition between MFIs on information asymmetry. As a result of increasing competition, the information sharing between MFIs may be challenging, and borrowers may engage in multiple borrowing, which in turn can make borrowers worse off with a single lender. Hermes et al. (\u003cspan citationid=\"CR13\" class=\"CitationRef\"\u003e2009\u003c/span\u003e) examined the relationship between financial development and competition of MFIs in terms of efficiency. Their results revealed that financial development could positively affect the efficiency and competition of MFIs.\u003c/p\u003e\u003cp\u003eIn recent studies investigating the microfinance market structure, researchers employed both structural and non-structural techniques. Uddin and Gupta (\u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e2012\u003c/span\u003e) addressed the market structure of the non-banking sector in Bangladesh and its change over time by adopting both discrete and cumulative measures of concentration and competition based on the SCP approach for assessing the competition during the period 1997\u0026ndash;2010. The study expresses differences between discrete (CRk) and cumulative (HHI, CCI, and HTI) measures in that the CRk considers the market share of the largest k institutions only, whereas the HHI considers the market share of all institutions operating in the market. The findings indicate that the market was highly concentrated in 1997. However, over the years, there has been a significant decrease in concentration levels, suggesting that competition has increased throughout the sample period. Assefa et al. (\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2013\u003c/span\u003e) analyzed the market structure of the microfinance industry by using the Lerner index as a non-structural measurement and spanning 73 countries, consisting of 362 MFIs from 1995 to 2008. The study concluded that during the later period, more competition was associated with a large number of emerging MFIs and rapid expansion in MFIs\u0026rsquo; branches. Kar and Swain (\u003cspan citationid=\"CR15\" class=\"CitationRef\"\u003e2014\u003c/span\u003e) support the findings of Assefa et al. (\u003cspan citationid=\"CR3\" class=\"CitationRef\"\u003e2013\u003c/span\u003e) by examining the HHI as a structural measure to analyze the microfinance industry structure of 71 countries, categorized into subsamples according to their geographical location, between 2003 and 2008. They discovered that the worldwide microfinance industry was moderately concentrated, with an average HHI value of 0.372. Kar (\u003cspan citationid=\"CR14\" class=\"CitationRef\"\u003e2016\u003c/span\u003e) examined the microfinance competition using a non-structural measurement called the Boone technique (developed by Boone (\u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e2008\u003c/span\u003e)). Ten countries were included, comprising 521 MFIs, from 2002 to 2008. The findings revealed that two countries witnessed a decline in competition due to the partial reconstruction of market power in the MFI industry. While the others maintained relatively fixed levels of competition during the study horizon.\u003c/p\u003e\u003cp\u003eMia (\u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2018\u003c/span\u003e) analyzed the market structure and concentration in the microfinance industry in Bangladesh. The sample consisted of 169 MFIs during the period 2009\u0026ndash;2014. The study examined the structural measurements, including the HHI and CRs, of the largest 3, 8, and 20 MFIs, as well as the Lerner index, a non-structural measurement. The results of HHI indicate that the sector concentration was moderate and, in the later stages, transitioned into an unconcentrated market. The CRs' values revealed the dominance of the industry by a few large MFIs. However, based on the Lerner index, the competition levels were relatively high. Navin and Sinha (\u003cspan citationid=\"CR20\" class=\"CitationRef\"\u003e2019\u003c/span\u003e) evaluated the concentration and competition degree of the Indian microfinance sector using the HHI and the CRs of the largest 5 and 10 Indian MFIs during the period 2005\u0026ndash;2017, based on an illustrative sample that includes firm-specific data from 127 MFIs of different legal statuses and sizes. The study analyzed the performance of leading MFIs to explore whether there is evidence of client abuse or market power practices by these institutions. The findings revealed a high concentration associated with lower competition levels over the later years. However, the study failed to find evidence regarding any attempts by the leading MFIs to utilize their market dominance to influence behavior.\u003c/p\u003e\u003cp\u003eIn the context of drivers of higher market concentration, Affeldt et al. (\u003cspan citationid=\"CR2\" class=\"CitationRef\"\u003e2021\u003c/span\u003e) examined whether efficiency, as a beneficial factor, or greater market power, as a harmful factor, drives increasing market concentration. The findings revealed that both patterns exist across various markets. The idea that concentration is driven by efficiency is supported by results related to intangible investments, which indicate the presence of scalability effects. Azar et al. (\u003cspan citationid=\"CR4\" class=\"CitationRef\"\u003e2022\u003c/span\u003e) noted that the HHI is commonly used as a measure of market concentration in both the industrial organization literature and practice. It is a simple and easy-to-calculate measure that can be used to assess the level of concentration in any market, regardless of the industry.\u003c/p\u003e"},{"header":"3. Measuring market concentration","content":"\u003cp\u003eBased on the literature, the market structure, as per the SCP approach, can be evaluated using the HHI, CR\u003csub\u003ek\u003c/sub\u003e of the largest k\u003csup\u003eth\u003c/sup\u003e institutions in the sector, and the number of firms in the industry. The central premise of the SCP approach is that high market concentration, resulting from the dominance of only a few firms, directly causes less competitive behavior and, consequently, lower industry performance (e.g., higher profits). (Brewer and Jackson, \u003cspan citationid=\"CR9\" class=\"CitationRef\"\u003e2004\u003c/span\u003e; Van et al., 2011).\u003c/p\u003e\u003cp\u003eHowever, since the CR is based solely on the market share of the most prominent firms, it does not provide a complete view of the market, as it overlooks smaller institutions (Mia, \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2018\u003c/span\u003e). Moreover, the CR is inadequate because it merely indicates the level of concentration, without providing enough information regarding the firm\u0026rsquo;s distribution (Bikker and Haaf, \u003cspan citationid=\"CR7\" class=\"CitationRef\"\u003e2002b\u003c/span\u003e). Thus, the firm\u0026rsquo;s number may not be a reliable indicator of concentration and competition (Mia, \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2018\u003c/span\u003e); instead, we should examine the potential number of entrants (Stiglitz et al., \u003cspan citationid=\"CR21\" class=\"CitationRef\"\u003e1987\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eHHI is considered one of the most significant techniques used to analyze competition compared to other market concentration measurements (Laine, \u003cspan citationid=\"CR16\" class=\"CitationRef\"\u003e1995\u003c/span\u003e). This measure is the most commonly used summary of concentration in theoretical studies and is frequently used as a benchmark for comparing other concentration measures. (Bikker and Haaf, \u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e2002a\u003c/span\u003e). According to Calkins (\u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e1983\u003c/span\u003e), HHI has three important properties. First, it reflects the shares of every firm in the market. Second, the HHI is lowest when market shares are equal and highest when one firm has a substantial market share. Third, any value of the HHI can be interpreted as a number equivalent, which simplifies the interpretation of the results. However, Bikker and Haaf (\u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e2002a\u003c/span\u003e) note that SCP approaches usually link competition to concentration. A market with a high level of concentration is usually associated with a lower level of competition and vice versa (Uddin and Gupta, \u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e2012\u003c/span\u003e).\u003c/p\u003e\u003cdiv id=\"Sec4\" class=\"Section2\"\u003e\u003ch2\u003e3.1. Data and Methodology\u003c/h2\u003e\u003cp\u003eThe data for this study were obtained from the World Bank Microfinance Information Exchange (MIX) database and the members\u0026rsquo; performance reports of the MFIs in Jordan issued by the Jordanian Microfinance Network (Tanmeyah). The data span the period 2009 to 2018, comprising a sample of seven MFIs out of nine listed in both the MIX database and the Jordan Microfinance Network for the same period, based on data availability\u003csup\u003e1\u003c/sup\u003e.\u003c/p\u003e\u003cp\u003eTo analyze the concentration level in the Jordanian microfinance sector, this study uses both the distinct CRk and the cumulative HHI measures, which are the most commonly employed indices (Bikker and Haaf, \u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e2002a\u003c/span\u003e). To understand how a few MFIs might control the microfinance industry, this study uses the concentration ratios CR2 and CR4, which represent the two largest and four largest Jordanian MFIs. The CRk is calculated using the following formula:\u003cdiv id=\"Equ1\" class=\"Equation\"\u003e\u003cdiv format=\"TEX\" class=\"mathdisplay\" id=\"FileID_Equ1\" name=\"EquationSource\"\u003e\n$$\\:{CR}_{k}=\\:\\sum\\:_{i=1}^{k}{MS}_{i}$$\u003c/div\u003e\u003cdiv class=\"EquationNumber\"\u003e1\u003c/div\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eWhere MSi is the largest market share among the ith market (two and four) MFIs, and k is the number of the largest MFIs. Note that CRk does not count all MFIs operating in an industry in a specific year.\u003c/p\u003e\u003cp\u003eCR is a one-dimensional measure that ranges from 0 to 1 (or 0 to 100% if expressed as a percentage). The index approaches zero when the kth institutions used in calculating the CR have equal MS, indicating a market with minimal concentration or maximum competition. Conversely, it approaches one if the kth institutions are concentrated (Bikker and Haaf, \u003cspan citationid=\"CR6\" class=\"CitationRef\"\u003e2002a\u003c/span\u003e).\u003c/p\u003e\u003cp\u003eMost of the MFI literature uses assets and/or loans as proxies for the MS (Uddin and Gupta, \u003cspan citationid=\"CR26\" class=\"CitationRef\"\u003e2012\u003c/span\u003e). However, most banking research relies on total assets as the primary measure of a bank's relative size (Mia, \u003cspan citationid=\"CR18\" class=\"CitationRef\"\u003e2018\u003c/span\u003e). Therefore, this study adopts gross loan portfolio (GLP) to calculate MS using the following formula.\u003cdiv id=\"Equ2\" class=\"Equation\"\u003e\u003cdiv format=\"TEX\" class=\"mathdisplay\" id=\"FileID_Equ2\" name=\"EquationSource\"\u003e\n$$\\:{MS}_{i}=\\frac{{GLP}_{i}}{\\sum\\:_{i}^{n}{GLP}_{i}}$$\u003c/div\u003e\u003cdiv class=\"EquationNumber\"\u003e2\u003c/div\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eWhere GLPi is the loan indicator of the ith institution operating in the microfinance sector during a specific year, and n represents the total number of MFIs active in the sector.\u003c/p\u003e\u003cp\u003eTo understand how all MFIs operate in the microfinance sector, this study employs the HHI, which is calculated as the sum of the squared market shares for all MFIs operating in the sector. The mathematical formula for calculating the HHI is defined as:\u003cdiv id=\"Equ3\" class=\"Equation\"\u003e\u003cdiv format=\"TEX\" class=\"mathdisplay\" id=\"FileID_Equ3\" name=\"EquationSource\"\u003e\n$$\\:HHI=\\:\\sum\\:_{i=1}^{n}{MS}_{i}^{2}$$\u003c/div\u003e\u003cdiv class=\"EquationNumber\"\u003e3\u003c/div\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eThe primary method of calculating an individual firm's market share (MSi) is indeed the same for both the HHI and CRk. Referring to the Horizontal Merger Guidelines issued by the U.S. Department of Justice and the Federal Trade Commission (DOJFTC), values of HHI below 15 percent are considered un-concentrated, values between 15 and 25 percent are moderately concentrated, and values above 25 percent are highly concentrated (Calkins, \u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e1983\u003c/span\u003e; Claudia, \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e2012\u003c/span\u003e). While an accurate calculation of the HHI requires including the market share of every firm in the relevant market, excluding tiny firms usually does not significantly alter the final HHI value (Claudia, \u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e2012\u003c/span\u003e).\u003c/p\u003e\u003c/div\u003e"},{"header":"4. Empirical Results and Discussion","content":"\u003cp\u003eIn the microfinance industry in Jordan, concentration measurements were conducted for the listed MFIs in the World Bank's database of microfinance information exchange MIX during the specific years 2009, 2012, 2015, and 2018. These measurements showed that 7 out of 9 institutions in the Jordanian microfinance market were included. The concentration was calculated based on each institution's gross loan portfolio using the previously mentioned concentration indicators: CR2, CR4, and HHI.\u003c/p\u003e\u003cp\u003eTable\u0026nbsp;\u003cspan refid=\"Tab1\" class=\"InternalRef\"\u003e1\u003c/span\u003e shows the gross loan portfolio of the seven Jordanian MFIs included in this study. The total gross loan portfolio steadily grew from approximately \u003cspan\u003e$\u003c/span\u003e75.03\u0026nbsp;million to \u003cspan\u003e$\u003c/span\u003e249.4\u0026nbsp;million between 2009 and 2018.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab1\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 1\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eMFI\u0026rsquo;s Gross Loan Portfolio (USD)\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"6\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colspan=\"4\" nameend=\"c6\" namest=\"c3\"\u003e\u003cp\u003eGross Loan Portfolio\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eNo.\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eFirm\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e2009\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e2012\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003e2015\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c6\"\u003e\u003cp\u003e2018\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e1\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNational Microfinance Bank (NMB)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e13,646,082\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e21,319,042\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e28,715,434\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e40,008,000\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e2\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eAhli Microfinance Company (AMC)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e5,132,590\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e9,240,751\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e16,567,300\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eNA\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e3\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eFINCA - JOR\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e3,626,058\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e7,610,301\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e16,442,038\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eNA\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e4\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eMicrofund for Women (MFW)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e17,100,338\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e36,187,992\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e67,830,296\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e86,455,111\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e5\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eTamweelcom\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e13,218,348\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e31,476,506\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e48,024,976\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e67,282,268\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e6\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eUNRWA- JOR\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e4,990,030\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e6,824,860\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e9,677,216\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e10,358,060\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e7\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eVitas JOR\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e17,311,961\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e26,017,168\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e42,841,704\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e45,299,838\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eTotal\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e\u003cb\u003e75,025,407\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e\u003cb\u003e138,676,620\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e\u003cb\u003e230,098,964\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e\u003cb\u003e249,403,277\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003ctfoot\u003e\u003ctr\u003e\u003ctd colspan=\"6\"\u003eSource: World Bank's database of microfinance information exchange MIX during the years 2009, 2012, 2015, and 2018\u003c/td\u003e\u003c/tr\u003e\u003c/tfoot\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eThe market share of MFIs was calculated using Eq.\u0026nbsp;\u003cspan refid=\"Equ2\" class=\"InternalRef\"\u003e2\u003c/span\u003e. Our results in Table\u0026nbsp;\u003cspan refid=\"Tab2\" class=\"InternalRef\"\u003e2\u003c/span\u003e show that Vitas JOR had the highest market share of 23.1 percent in 2009, while Microfund for Women (MFW) had the highest market shares of 26.1%, 29.5%, and 34.7% in 2012, 2015, and 2018, respectively.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab2\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 2\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eMFI\u0026rsquo;s Market Share\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"6\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colspan=\"4\" nameend=\"c6\" namest=\"c3\"\u003e\u003cp\u003eMarket Share (MS)\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eNo.\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eFirm\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e2009\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e2012\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003e2015\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c6\"\u003e\u003cp\u003e2018\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e1\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNational Microfinance Bank (NMB)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.182\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.154\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e0.125\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.160\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e2\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eAhli Microfinance Company (AMC)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.068\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.067\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e0.072\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eNA\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e3\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eFINCA - JOR\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.048\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.055\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e0.071\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eNA\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e4\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eMicrofund for Women (MFW)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.228\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.261\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e0.295\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.347\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e5\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eTamweelcom\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.176\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.227\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e0.209\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.270\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e6\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eUNRWA- JOR\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.067\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.049\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e0.042\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.042\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e7\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eVitas JOR\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.231\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.188\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e0.186\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.182\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eTotal\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c3\"\u003e\u003cp\u003e\u003cb\u003e1\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c4\"\u003e\u003cp\u003e\u003cb\u003e1\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c5\"\u003e\u003cp\u003e\u003cb\u003e1\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e\u003cb\u003e1\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eSource: Prepared by the authors based on Eq.\u0026nbsp;\u003cspan refid=\"Equ2\" class=\"InternalRef\"\u003e2\u003c/span\u003e.\u003c/p\u003e\u003cp\u003eTo examine how a few MFIs may dominate the microfinance industry, this study chose to use the concentration ratios CR2 and CR4 of the two largest and four largest Jordanian MFIs. The CRk is calculated using Eq.\u0026nbsp;\u003cspan refid=\"Equ1\" class=\"InternalRef\"\u003e1\u003c/span\u003e, and the results are shown in Table\u0026nbsp;\u003cspan refid=\"Tab3\" class=\"InternalRef\"\u003e3\u003c/span\u003e.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab3\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 3\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eConcentration Ratios of MFIs\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"5\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eConcentration Ratio\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003e2009\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e2012\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e2015\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003e2018\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003eCR\u003c/b\u003e\u003csub\u003e\u003cb\u003e2\u003c/b\u003e\u003c/sub\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.459\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.488\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.504\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.617\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e\u003cb\u003eCR\u003c/b\u003e\u003csub\u003e\u003cb\u003e4\u003c/b\u003e\u003c/sub\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.817\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.830\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.815\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.959\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eSource: Prepared by the authors based on Eq.\u0026nbsp;\u003cspan refid=\"Equ1\" class=\"InternalRef\"\u003e1\u003c/span\u003e.\u003c/p\u003e\u003cp\u003eIn 2009, the CR of the largest two institutions (Vitas JOR and Microfund for Women (MFW)) was about 45.9 percent, while the CR of the largest four institutions (Vitas JOR, Microfund for Women (MFW), National Microfinance Bank (NMB), and Tamweelcom) was about 81.7 percent. In 2012, the two largest institutions were Microfund for Women (MFW) and Tamweelcom, with a concentration of 48.8 percent. This was similar to the situation in 2009, when the largest four institutions had a concentration of about 83 percent. In 2015, the two largest institutions remained unchanged from 2012, with a concentration of 50.4 percent. The largest four institutions, as of 2009 and 2012, had a concentration of 81.5 percent. The CRs in 2018 were similar to those in previous years for the most prominent two and four institutions, with concentrations of 61.7% and 95.9%, respectively. Therefore, based on CRs, the Microfinance sector remains highly concentrated, with a handful of large institutions controlling the market, which reveals that a limited number of large-scale MFIs control the market.\u003c/p\u003e\u003cp\u003eFurthermore, to derive more general criteria about the concentration of MFIs, this study presents concentration curves. These curves are determined by the cumulative percentage of the industry's size, expressed as the sum of the market shares of the institutions, on the vertical axis, and the cumulative number of institutions, arranged from the largest to the smallest, on the horizontal axis. The concentration curves of the Jordanian MFIs are presented in Table\u0026nbsp;\u003cspan refid=\"Tab4\" class=\"InternalRef\"\u003e4\u003c/span\u003e and Fig.\u0026nbsp;\u003cspan refid=\"Fig1\" class=\"InternalRef\"\u003e1\u003c/span\u003e.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab4\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 4\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003eMFIs\u0026rsquo; Concentration ratios in years 2009, 2012, 2015, and 2018\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"5\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eCumulative Number of MFIs From Largest to Smallest\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eConcentration in 2009\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003eConcentration in 2012\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003eConcentration in 2015\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003eConcentration in 2018\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003e0\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003e0.00\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e0.00\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e0.00\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003e0.00\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e1\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.23\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.26\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.29\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.35\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e2\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.46\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.49\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.50\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.62\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e3\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.64\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.68\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.69\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.80\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e4\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.82\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.83\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.81\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.96\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e5\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.89\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.90\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.89\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e1.00\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e6\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e0.95\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.95\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.96\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e1.00\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e7\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c2\"\u003e\u003cp\u003e1.00\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e1.00\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e1.00\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e1.00\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003e\u003c/p\u003e\u003cp\u003eFigure \u003cspan refid=\"Fig1\" class=\"InternalRef\"\u003e1\u003c/span\u003e shows that the concentration ratio (CR4) increased gradually from 2009 to 2015 and reported a significant rise between 2015 and 2018. This indicates that the four largest MFIs have become increasingly dominant in the Jordanian microfinance sector.\u003c/p\u003e\u003cp\u003eRegarding the HHI index, it can be calculated, as previously mentioned in Eq.\u0026nbsp;\u003cspan refid=\"Equ3\" class=\"InternalRef\"\u003e3\u003c/span\u003e, by summing the squares of the market shares of the Jordanian MFIs. The results of the HHI are displayed in Table\u0026nbsp;\u003cspan refid=\"Tab5\" class=\"InternalRef\"\u003e5\u003c/span\u003e.\u003c/p\u003e\u003cp\u003e\u003cdiv class=\"gridtable\"\u003e\u003ctable float=\"Yes\" id=\"Tab5\" border=\"1\"\u003e\u003ccaption language=\"En\"\u003e\u003cdiv class=\"CaptionNumber\"\u003eTable 5\u003c/div\u003e\u003cdiv class=\"CaptionContent\"\u003e\u003cp\u003e\u003cem\u003eHerfindahl\u0026ndash;Hirschman Index (HHI)\u003c/em\u003e results\u003c/p\u003e\u003c/div\u003e\u003c/caption\u003e\u003ccolgroup cols=\"6\"\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c1\" colnum=\"1\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c2\" colnum=\"2\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c3\" colnum=\"3\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c4\" colnum=\"4\"\u003e\u003c/div\u003e\u003cdiv align=\"char\" char=\".\" class=\"colspec\" colname=\"c5\" colnum=\"5\"\u003e\u003c/div\u003e\u003cdiv align=\"left\" class=\"colspec\" colname=\"c6\" colnum=\"6\"\u003e\u003c/div\u003e\u003cthead\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u0026nbsp;\u003c/th\u003e\u003cth align=\"left\" colspan=\"4\" nameend=\"c6\" namest=\"c3\"\u003e\u003cp\u003eSquared Market Share (MS\u003csup\u003e2\u003c/sup\u003e)\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003ctr\u003e\u003cth align=\"left\" colname=\"c1\"\u003e\u003cp\u003eNo.\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c2\"\u003e\u003cp\u003eMFIs\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c3\"\u003e\u003cp\u003e2009\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c4\"\u003e\u003cp\u003e2012\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c5\"\u003e\u003cp\u003e2015\u003c/p\u003e\u003c/th\u003e\u003cth align=\"left\" colname=\"c6\"\u003e\u003cp\u003e2018\u003c/p\u003e\u003c/th\u003e\u003c/tr\u003e\u003c/thead\u003e\u003ctbody\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e1\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eNational Microfinance Bank (NMB)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.033\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.024\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.016\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.026\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e2\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eAhli Microfinance Company (AMC)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.005\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.004\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.005\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eNA\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e3\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eFINCA - JOR\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.002\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.003\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.005\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003eNA\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e4\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eMicrofund for Women (MFW)\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.052\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.068\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.087\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.120\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e5\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eTamweelcom\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.031\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.052\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.044\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.073\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e6\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eUNRWA- JOR\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.004\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.002\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.002\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.002\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u003cp\u003e7\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003eVitas JOR\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e0.053\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e0.024\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e0.035\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e0.033\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003ctr\u003e\u003ctd align=\"left\" colname=\"c1\"\u003e\u0026nbsp;\u003c/td\u003e\u003ctd align=\"left\" colname=\"c2\"\u003e\u003cp\u003e\u003cb\u003eHI\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c3\"\u003e\u003cp\u003e\u003cb\u003e0.181\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c4\"\u003e\u003cp\u003e\u003cb\u003e0.188\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"char\" char=\".\" colname=\"c5\"\u003e\u003cp\u003e\u003cb\u003e0.193\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003ctd align=\"left\" colname=\"c6\"\u003e\u003cp\u003e\u003cb\u003e0.253\u003c/b\u003e\u003c/p\u003e\u003c/td\u003e\u003c/tr\u003e\u003c/tbody\u003e\u003c/colgroup\u003e\u003c/table\u003e\u003c/div\u003e\u003c/p\u003e\u003cp\u003eSource: Prepared by the authors based on Eq.\u0026nbsp;\u003cspan refid=\"Equ3\" class=\"InternalRef\"\u003e3\u003c/span\u003e.\u003c/p\u003e\u003cp\u003eThe HHI results in Table\u0026nbsp;\u003cspan refid=\"Tab5\" class=\"InternalRef\"\u003e5\u003c/span\u003e indicate that the industrial concentration of Jordanian MFIs increased gradually from 18.1 percent in 2009 to 25.3 percent in 2018, which is consistent with the concentration ratios. However, the HHI computation reveals that the microfinance industry is moderately concentrated as the HHIs were around 18 percent to 19 percent during the years 2009, 2012, and 2015, respectively. Recently, in 2018, it transitioned to a highly concentrated sector, with the HHI reaching 25 percent. Such a finding is important because it suggests that the industry is still evolving. This in turn reveals that there is still an opportunity for new MFIs to enter the sector, and for existing MFIs to grow and expand. This rise in concentration can be explained by two possible reasons. First, the MFIs in Jordan are still young and growing, and it is normal to observe that some of the MFIs are growing larger than the others. The second reason may be that Jordanian governmental regulations have served the larger MFIs better, as they are more effective in managing risks compared to emerging institutions, and can provide a broader range of services to their clients. In addition, larger MFIs may be able to offer more competitive interest rates and fees, and they have more ability to innovate and develop new products and services.\u003c/p\u003e\u003cp\u003eOn the other hand, higher concentration for a few of the largest institutions may influence the competition, resulting in higher prices for consumers and less consumer surplus. It is also important to note that larger MFIs may be more vulnerable to systemic risk. Thus, the policymakers and other stakeholders should carefully monitor the situation in the microfinance sector and take steps to mitigate the potential drawbacks of increased concentration. For example, the CBJ and government regulation have the option to stimulate the establishment of new MFIs and actively foster competition within the sector by providing the required support and facilities for new and emerging institutions. Furthermore, the government could work to strengthen the regulatory framework for the microfinance sector, ensuring that consumers are adequately protected from the practices and market power of large institutions. Furthermore, policymakers should establish a stable macroeconomic and business environment that facilitates the operations and expansion of MFIs, as well as a well-developed financial infrastructure to sustain the development of microfinance.\u003c/p\u003e\u003cp\u003eThese findings may contribute to the existing literature by providing empirical evidence regarding the evolution of market structure in Jordan\u0026rsquo;s microfinance sector, as it is becoming increasingly concentrated. These crucial findings provide significant implications for practitioners as well. the finding of higher concentration associated with lower competition highlights awareness needs among practitioners regarding the greater competitive pressure from dominant MFIs. Thus, practitioners can respond to this challenge by seeking new products and services, diversifying their portfolios, and improving their operational efficiency.\u003c/p\u003e"},{"header":"5. Conclusion","content":"\u003cp\u003eThe microfinance industry in Jordan is a key player in the country's financial system. Specifically, it is a vibrant and growing sector that plays a crucial role in providing access to financial services for low-income individuals and small businesses, including microenterprises. The industry has also helped to create jobs and improve the living standards of low-income households. The industry has experienced significant growth in recent years and is expected to continue growing in the years to come, provided it receives effective regulation and guidance.\u003c/p\u003e\u003cp\u003eHowever, our empirical results show that the Jordanian microfinance sector has recently transitioned into a highly concentrated sector, with a smaller number of MFIs still dominating the industry. According to HHI, Jordan's microfinance sector was moderately concentrated in 2009, 2012, and 2015, respectively. Recently, it has evolved into a highly concentrated sector. Furthermore, the two and four largest MFIs account for over 60 percent and 90 percent, respectively, of the total market share, indicating that the few largest MFIs have become increasingly dominant in the Jordanian microfinance sector. This would lead to a reduction in competitive behavior and industry performance. In contrast, this high degree of concentration is a concern, as it could lead to a lack of innovation in the industry and make it more difficult for new entrants to enter the market.\u003c/p\u003e\u003cp\u003eBy understanding the structure of the microfinance market, policymakers can develop more effective policies to support the sector's growth and development. Practitioners can also utilize these findings to develop more effective business strategies and compete more competitively in the Jordanian microfinance market. Overall, the results of this study add valuable insights to our understanding of the microfinance industry in Jordan. These findings can inform policymakers and practitioners in making informed decisions about supporting the industry's development and protecting consumer interests.\u003c/p\u003e"},{"header":"Declarations","content":"\u003cp\u003eThe authors confirm that there are no known conflicts of interest related to this publication. Additionally, the clinical trial number, the sections on Ethics, Consent to Participate, and Consent to Publish are not applicable.\u003c/p\u003e\u003c/p\u003e\u003cp\u003e\u003cstrong\u003eDeclaration of Funding\u003c/strong\u003e\u003cp\u003eThe authors declare that no funding, financial support, or specific grant was received from any funding agency, commercial entity, or not-for-profit organization to conduct the research, analyze the data, or prepare the manuscript.\u003c/p\u003e\u003c/p\u003e\u003ch2\u003eAuthor Contribution\u003c/h2\u003e\u003cp\u003eMohammad W. Alomari wrote the main manuscript text and analysis. Nahil Saqfalhait finalized and coordinate the manuscript. All authors reviewed the manuscript.\u003c/p\u003e\u003ch2\u003eData Availability\u003c/h2\u003e\u003cp\u003eThe data and materials supporting the results and analyses presented in this paper are available from the corresponding author upon reasonable request.\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003eAbdullah MR, Jalil A, S. Industrial Structure and Concentration in the Malaysian Manufacturing Industry. Int J Manage Stud (IJMS). 2006;13:83\u0026ndash;101.\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003eAffeldt P, Duso T, Gugler KP, Piechucka J. (2021). Market concentration in Europe: Evidence from antitrust markets. CESifo Working Paper No. 8866.\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003eAssefa E, Hermes N, Meesters A. Competition and the Performance of Microfinance Institutions. 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Econ J. 2008;118(531):1245\u0026ndash;61.\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003eBrewer E, Jackson WE. (2004), The \u0026lsquo;risk-adjusted\u0026rsquo; price-concentration relationship in banking, Federal Reserve Bank of Atlanta, Working Paper No. 2004-35, Atlanta, GA.\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003eCalkins S. The New Merger Guidelines and the Herfindahl-Hirschman Index. Calif Law Rev. 1983;71(2):402\u0026ndash;29.\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003eClaudia D. Measuring market concentration according to European competition policy. Analele Universitatii Maritime Constanta. 2012;18(2):265\u0026ndash;70.\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003eConsultative Group to Assist the Poor. (2001). Commercialization and Mission Drift: The Transformation of Microfinance in Latin America. 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Technological change, sunk costs, and competition. Brook Papers Econ Act. 1987;1987(3):883\u0026ndash;947.\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003eThe World Bank. (2024). Poverty and Equity Brief, Middle East and North Africa, Jordan. Available at.\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003ehttps://\u003cspan class=\"ExternalRef\"\u003e\u003cspan class=\"RefSource\"\u003edatabankfiles.worldbank.org/public/ddpext_download/poverty/33EF03BB-9722-4AE2-ABC7-AA2972D68AFE/Global_POVEQ_JOR.pdf\u003c/span\u003e\u003cspan address=\"http://databankfiles.worldbank.org/public/ddpext_download/poverty/33EF03BB-9722-4AE2-ABC7-AA2972D68AFE/Global_POVEQ_JOR.pdf\" targettype=\"URL\" class=\"RefTarget\"\u003e\u003c/span\u003e\u003c/span\u003e\u003c/span\u003e\u003c/li\u003e\u003cli\u003e\u003cspan\u003eThe World Bank. (2021). Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19. The Global Findex Database. 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Appl Econ. 2011;43(23):3155\u0026ndash;67.\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"},{"header":"Footnotes","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003e Following Bansah and Adjei (2023), the data on microfinance institutions listed in the World Bank database (MIX) are available until the year 2018, after which there is not any reported data within the MIX database regarding MFIs.\u003c/span\u003e \u003c/li\u003e\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":true,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"discover-sustainability","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"disu","sideBox":"Learn more about [Discover Sustainability](https://www.springer.com/43621)","snPcode":"","submissionUrl":"","title":"Discover Sustainability","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Discover Series","inReviewEnabled":true,"inReviewRevisionsEnabled":true},"keywords":"Microfinance, Market structure, Concentration, and Structure-Conduct-Performance (SCP) approach","lastPublishedDoi":"10.21203/rs.3.rs-8080485/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8080485/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThe scope of our study is to investigate the concentration levels and analyze the market structure of Jordan’s microfinance sector. Utilizing the gross loan portfolio as a measurement of credit market share, this study constructs the Structure Conduct Performance SCP approach measured by the Herfindahl-Hirschman Index HHI technique, and the Concentration Ratios CRs. The results of the HHI reveal that the Jordanian microfinance sector was moderately concentrated, with average HHI values ranging from 18 to 19 percent from 2009 to 2015. However, it has recently transitioned to become highly concentrated, with the HHI reaching 25 percent in 2018. However, based on the CR, the largest two and four MFIs dominate the industry, accounting for more than 60 percent and 90 percent, respectively.\u003c/p\u003e\n\u003cp\u003eOur findings will enhance the vision of the Jordanian microfinance industry structure and provide recommendations to policymakers and practitioners.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eJEL Classification:\u003c/strong\u003e D4, L1, G2.\u003c/p\u003e","manuscriptTitle":"Concentration and Market Structure Analysis in Jordanian Microfinance Industry: Using the SCP Approach","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-11-27 18:56:03","doi":"10.21203/rs.3.rs-8080485/v1","editorialEvents":[{"type":"communityComments","content":0},{"type":"decision","content":"Revision requested","date":"2025-12-14T12:47:16+00:00","index":"","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2025-12-12T12:51:12+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"319361536362106183286389328356832789760","date":"2025-12-07T21:18:41+00:00","index":"hide","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2025-12-07T19:57:39+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"175464228337437814888894745746012375694","date":"2025-12-05T17:52:45+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"264883826878256795719674084717484148398","date":"2025-12-05T16:24:07+00:00","index":"hide","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2025-11-30T18:23:37+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"244191932320948519930922743947454701180","date":"2025-11-26T18:35:44+00:00","index":"hide","fulltext":""},{"type":"editorInvitedReview","content":"","date":"2025-11-22T13:18:38+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"33373954913104761917101116006991235228","date":"2025-11-21T11:48:51+00:00","index":"hide","fulltext":""},{"type":"reviewerAgreed","content":"90652132509028655068575341939767431788","date":"2025-11-19T14:38:11+00:00","index":"hide","fulltext":""},{"type":"reviewersInvited","content":"","date":"2025-11-19T11:41:41+00:00","index":"","fulltext":""},{"type":"editorAssigned","content":"","date":"2025-11-13T08:23:20+00:00","index":"","fulltext":""},{"type":"checksComplete","content":"","date":"2025-11-13T08:20:13+00:00","index":"","fulltext":""},{"type":"submitted","content":"Discover Sustainability","date":"2025-11-10T20:37:29+00:00","index":"","fulltext":""}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"discover-sustainability","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"disu","sideBox":"Learn more about [Discover Sustainability](https://www.springer.com/43621)","snPcode":"","submissionUrl":"","title":"Discover Sustainability","twitterHandle":"","acdcEnabled":true,"dfaEnabled":true,"editorialSystem":"stoa","reportingPortfolio":"Discover Series","inReviewEnabled":true,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"43074d91-024a-4682-bd58-254f401ef278","owner":[],"postedDate":"November 27th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"published-in-journal","subjectAreas":[],"tags":[],"updatedAt":"2026-03-23T16:05:38+00:00","versionOfRecord":{"articleIdentity":"rs-8080485","link":"https://doi.org/10.1007/s43621-026-02936-0","journal":{"identity":"discover-sustainability","isVorOnly":false,"title":"Discover Sustainability"},"publishedOn":"2026-03-16 15:57:59","publishedOnDateReadable":"March 16th, 2026"},"versionCreatedAt":"2025-11-27 18:56:03","video":"","vorDoi":"10.1007/s43621-026-02936-0","vorDoiUrl":"https://doi.org/10.1007/s43621-026-02936-0","workflowStages":[]},"version":"v1","identity":"rs-8080485","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-8080485","identity":"rs-8080485","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}