To formalize or not to formalize? Iqlaa helps small businesses take the right step
In 2019, inspired by a report on Jordan's food waste problem, 48-year-old Samer Abd-Al Dayem founded 'The Green Smart Village' in Ma’an, Jordan - a business for recycling food waste into organic fertilizers. Despite his passion for the green business, he could not take the formalization step as he was discouraged by many around him about the perceived complexities and costs involved.
For two years, Samer ran his business on a small scale. When he sought to expand his operations, he came across the regulations and requirements by the Ministry of Environment for these types of businesses. For The Green Smart Village to scale up, it needed to be registered as a formal business, which required a compulsory environmental impact assessment (EIA); a tool used to evaluate the significant effects of a project on the environment.
With external funding and after a six-month approval cycle, Samer was finally able to complete the EIA for his business. However, he remained apprehensive about formalization due to the rumored complexities of the process.
Determined to move beyond the limitations of running an informal business, Samer decided to focus on further developing his entrepreneurial, managerial and financial knowledge and skills. To achieve that, he enrolled in the ‘Integrated, Intensive, Capacity-Building Program (IICP)’ by USAID Informal Livelihoods Advancement Activity (Iqlaa).
Thanks to Iqlaa’s formalization inquiry center, my business is officially registered, and it is set to explore wider markets.
Samer Abd-Al Dayem, Small business owner
During the IICP training, Samer learned about the Business Registration and Formalization Inquiry Center - one of the many services Iqlaa provides. “When I heard the words ‘formalization inquiry service’, I couldn’t wait to call them. I felt like I was a drowning man and Iqlaa was offering the straw I needed to clutch at.”
Understanding the requirements and process for business registration is crucial for informal home-based, micro, and small businesses like Samer’s, that seek to stabilize and grow. To address this need, Iqlaa, through its implementation partner Anderson, established the Business Registration and Formalization Inquiry Center – a call center that aims to assist small businesses in making an informed decision about formalization, and assist them throughout the process if they choose to.
Samer was happily surprised by the simplicity of the registration process explained by the advisor at Iqlaa's call center. “When I called, the advisor explained that as I have already completed the EIA, all I needed next was my ID and 40 JOD to register the business at the Ministry of Industry and Trade. I couldn't believe it could be that straightforward!”
Reflecting on the call, Samer added, “It wasn't just about answering my questions. The advisor responded swiftly, took a genuine interest in my business, and listened to me attentively. Based on my input, he explained clearly the steps needed to formalize my business.”
Skeptical but hopeful, Samer followed Iqlaa’s guidance and advice, and after barely 20-minutes at the Ministry, his business was officially registered. Holding his registration papers, Samer commented, “The joy and pride I felt at that moment reminded me of the day I received my university graduation certificate! With my business formalized now, I am determined to scale up my business operation and increase production in few months.”
While some business formalization procedures are straightforward, as was the case with Samer, others can be more complex and costly. Understanding this, Iqlaa’s Business Registration and Formalization Inquiry Center approaches each business on a case-by-case basis. The advisory team considers factors such as the sector, number of owners, required documents, and capital. This thorough analysis helps them guide business owners to the most suitable options and clarify the commitments involved.
The center’s advisory service, which typically lasts between 20 to 60 minutes, provides home, micro, and small business owners with crucial information, including the entities to contact or visit, registration fees, and the most suitable types of registration for their specific business fields and future plans.
Since its launch in February 2024, the center has assisted around 184 business owners in exploring their registration options.