FSVC began work in Tunisia in 2018 to develop and deliver innovative financial products through non-traditional lenders and investors, and to build the capacity of business support organizations (BSOs) to provide improved services to strengthen SME access to finance.
- Encouraged private equity and venture capital investors to adopt Revenue Capital, a fundamentally new investment structure in Tunisia that brought about systemic changes to Tunisia’s financial landscape for SME financing;
- Assisted policymakers and financial sector regulators in establishing regulations conducive to SME financing via crowdfunding;
- Supported the capacity of leasing and factoring companies (LFCs) to develop a digital platform to process SMEs’ credit applications, introduce financial products for SMEs, and reach out to new SME markets, including women- and youth-owned SMEs;
- Enhanced the capacity of business support organizations to provide improved services and yield investor-ready SMEs;
- Strengthened the capacity of the Tunisian Bankers’ Association to stimulate credit flows to SMEs; and
- Supported the local SME investing network in Sfax, Tunisia.
Program Impact
- The operationalization of the Fonds d’Assistance à la Restructuration des PMEs (FAR – SME Restructuring Support Fund) as a result of a series of strategic and operational activities provided to the Government of Tunisia (GoT). To date, the FAR has successfully processed 376 applications (of which 224 were approved), disbursed approximately US$11 million, and helped safeguard 8,606 jobs.
- The design of a Manual of Procedures to help business centers (BCs) provide effective services (e.g., business networking, pre-creation assistance and post-creation assistance) to SMEs and entrepreneurs. A significant outcome has been the formal adoption of the Manual between the government and BCs, enabling the BC’s to receive financial support from the government for delivering the services outlined in the Manual.
- The launch of a pilot “Portfolio Management” (PM) service at 10 BCs across Tunisia. These BCs now offer local banks a service to monitor the loans.
- The strengthened capacity of leasing and factoring companies (LFCs) to provide credit to SMEs, and the modernization of the LFC sector by: 1) designing a Leasing Platform to digitalize several parts of the credit underwriting process and allow remotely-located SMEs to apply for leasing products; 2) helping to build a credit scoring model to improve their risk management processes; and 3) providing operational support to advocate for financial-sector reforms to remove barriers preventing LFCs from expanding credit to SMEs.
- The introduction of Revenue Capital (RC) in the Tunisian context, a major financial innovation that fills a critical financial instrument gap in SME financing, bridging the gap between bank loans and the traditional financing approach used by Tunisian private equity investors.