Loan to Microcred Tunisie for on-lending to MSMEs
The European Bank for Reconstruction and Development (EBRD) is further supporting micro and small enterprises (MSEs) in Tunisia by providing a TND 4 million (€1.6 million equivalent) loan to Microcred Tunisie S.A. (Microcred), a microfinance institution that began operating in November 2014.
This loan will help Microcred to increase its lending capacity at a time when the firm is rapidly developing its activities in the country through the expansion of its branch network. Microcred will on-lend these funds to micro, small and medium-sized enterprises (MSMEs), with a particular focus on the development of poorer regions and women-led businesses, thus supporting job creation.
The EBRD has recently established a source of funding in Tunisian dinars, which allows it to provide loans in local currency without requiring hedging. This loan to Microcred is the first to be provided by the EBRD under this new facility.
The transaction is made under the EBRD Financial Inclusion programme for the southern and eastern Mediterranean region which aims to boost access to finance for micro and small businesses. The programme will deliver at least €100 million of EBRD funding to partner financial institutions for on-lending, and benefits from €27.6 million grant funds from the European Union.
Marie-Alexandra Veilleux-Laborie, Head of EBRD Operations in Tunisia, said: “The EBRD is the only international financial institution to be able to channel loans in dinars to the real economy. We are very pleased to extend our support for microfinance in Tunisia and further contribute to economic growth and increasing job opportunities in the country. Partnering with Microcred will allow us to reach out to very small firms that lack access to finance.”
Sehl Zargouni, Chief Executive Officer of Microcred Tunisie, commented: “This first, important loan will allow Microcred Tunisie to reach its main goal by providing financial inclusion for small business owners in areas where microfinance is currently unavailable. Getting the EBRD support will allow us to extend our branch activities and increase our operational efficiency in order to cover more disadvantaged regions and to improve the economic and social conditions of those who are excluded from the traditional financial system. Microcred Tunisie intends to enhance employment opportunities and increase job creation in remote areas.”
The EBRD has been investing in Tunisia since 2012 and has funded more than 25 projects in the private sector for a total of over €350 million. In the financial sector, since January 2014 the EBRD has disbursed seven loans to banks, leasing companies and microfinance firms for a total amount of over €140 million.
The EBRD’s strategic plan for the period 2016-18 has three priorities: strengthening economic resilience, addressing global challenges and supporting regional integration.