Formation and establishment of the bank

  • In 1951, a specialized financial institution was established to finance municipal projects under the name of the Economic Development Fund with a modest capital of 68 thousand dinars

  • In 1955 this fund was transferred to the reconstruction Council under the name of the municipal loan fund with a capital of (1.7) million dinars and merged with the rural reform department.

  • In 1966, the fund became an independent institution under the name of the municipal loan fund with a capital of (2.1) million dinars.

  • On 16/9/1979, the cities and villages Development Bank was established with a capital of (5.8) million dinars.

  • In 1982, the bank's capital was raised to 12 million dinars.

  • In 1996, the bank's capital was raised to 25 million dinars.

  • In 2002, the bank's capital was raised to 50 million dinars.

  • In 2016, the bank's capital was raised to 100 million dinars.

  • In 2017, the bank's capital was raised to (110) million dinars.


Cities and villages Development Bank is an official public institution with a legal personality that is administratively and financially independent. Founded in 1979, the share capital of the bank authorized (110) million dinars, while the paid-up capital and reserves ( 110 ) million dinars for the financial year ending 31/12/2023 according to the following table:

Contributor authorized capital ratio
Jordan Government Contribution 77,800,000 JD   68%
Central Bank of Jordan Contribution 2,200,000 JD 2%
Local Authorities Contribution 30,000,000JD 30%


110,000,000 JD 100%



The bank provides the necessary long-term financing for the establishment of Service and production projects implemented by local authorities in the kingdom, where the bank provided the necessary financing for development and service projects in all cities and villages of the kingdom. The bank also manages and guarantees loans held by these bodies with any other entity aimed at providing basic services to local communities, assists local bodies in prioritizing their productive projects in the light of their economic feasibility, provides expertise and technical and training services to raise the level of their employees, and manages the funds of local bodies collected by the government.

The amended law of the cities and villages Development Bank No. 8 of 2022 was approved on April 17, 2022 (an amended law of the cities and villages Development Bank Law No. 63 of 1985). According to Article (5) of the bank's law, the bank aims to achieve comprehensive local development in municipalities, support their projects and help them fulfill their duties through the following:

1. Providing banking services and credit facilities, including non-interest-based ones, to municipalities, the Aqaba Special Economic Zone Authority, the Petra Tourism Development Region Authority, or to an entity working to achieve local development.

2. Providing banking services and credit facilities for partnership projects between municipalities and the private sector.

3. Managing grants and loans, monitoring them and verifying their use in the areas of spending allocated to them.

4. Motivating municipalities to improve their financial performance, which is reflected in the volume and cost of borrowing.

5. Conducting studies, providing a database and information related to municipalities, analyzing them, and conducting credit rating of municipalities. 6. Providing expertise and technical and advisory services to municipalities.


Bank Board of directors:

The bank is managed by eleven-member board of directors as follows:

  • Deputy Prime Minister, Minister of Local Administration as chairman. 
  • Vice Chairman of the Board of Directors, Secretary General of the Ministry of Local Administration as vice-president.
  • A representative of the Ministry of Finance as a member.
  • A representative of the Ministry of Public Works as a member.
  • A representative of the Ministry of planning as a member.
  • A representative of the central bank as a member.
  • Three representatives of municipalities as members.
  • A tow representatives from the Private sector as members.

The executive branch of the bank is headed by the general manager, who is appointed by a decision of the Council of ministers on the basis of the placement of the board of directors and who implements the decisions of the board, applies the general policy of the bank, supervises the administrative body and exercises the powers conferred upon it by the regulations issued by

Objectives and duties of the bank:

  • Support the projects of local bodies to secure services aimed at the creation of basic public services and contribute to their development by mobilizing domestic and external financial resources and providing the necessary credit facilities for the implementation of these projects.
  • Manage and guarantee loans made by local authorities and perform any banking function, transaction or work required by the execution of its duties under this law or any other legislation or under any international agreement to which the government of the kingdom is a party and whose implementation requires the participation of the bank.
  • Assist local authorities in prioritizing productive projects in light of their economic feasibility and contributing to the capital of these projects.
  • Assist in providing expertise and technical services including training of technicians needed by local bodies.
  • Provide facilities to any local authority or institution whose objectives include the provision of basic services within the boundaries of local bodies.
  • Financing projects for local entities that are not based on interest on the grounds and conditions established by a system issued to that end.

Banking activity:

  1. The bank collects government revenues from taxes and fees (revenues from government subsidies, vehicle licenses, fines and infractions ) and distributes them to municipalities according to the established foundations of the Cabinet of ministers.
  2. Open commercial bank accounts to receive municipal collections from their own revenues or other accounts with the bank and direct exchange of municipal customers from contractors and suppliers from this account.
  3. Opening accounts for trusts through which social security, health insurance, employee trusts and other trusts are disbursed.
  4. Since 2017, the bank has started electronic payments through the system of e-bills (Social Security - roofs-vocational licenses-electricity-water-tickets-university fees).
  5. Opening accounts for municipal trainee engineers and disbursing their monthly salaries.
  6. Receipt and delivery of guarantees (entry for tender - good execution –maintenance).
  7. Follow-up and unlock special accounts in international projects and foreign exchange them.

Lending activity:

The bank provided long-term loans to local authorities for the purpose of financing services and production projects at affordable interest rates .the amount of loans during 2017 amounted to (9,550. 0) million dinars. the following table shows the distribution of loans. One of the most important projects financed by the bank :

  1. Service projects include infrastructure projects.
  2. Production projects are financially beneficial to the municipality.
Purpose Quantity Amount in JD
Service 4 2,750,000
Production 4 6,800,000


8 9,550,000


3. As of the beginning of 2010, the bank began to finance income-generating investment projects in partnership with municipalities and the private sector in the implementation of the strategic plan to diversify the sources of income for municipalities and the bank, where the number of projects studied and approved and implemented (4) projects in the municipalities of Ruseifa, Shawna and Ma'an with a total value of (1.9) million dinars. The bank also actively participates in the development of municipal work and control of spending by granting certain municipalities facilities in debit current accounts to cover financing needs.