EBRD and EU boost financial inclusion and growth with new credit line
The EBRD is providing a comprehensive financial package to Union Bancaire pour le Commerce et l’Industrie (UBCI), a commercial bank in Tunisia, to support the expansion of the local economy.
The package consists of a credit line for small and medium-sized enterprises (SMEs) for €30 million, a trade finance limit of up to US$ 10 million and a risk-sharing framework of up to €10 million.
The loan will be on-lent to SMEs to increase their access to much-needed funding. These businesses are the engine of the Tunisian economy, accounting for 90 per cent of all firms. They are therefore vital to provide jobs, build a modern diverse economy and to boost long-term, sustainable growth.
The trade finance limit will enable UBCI to engage in supporting exports and imports by Tunisian companies under the EBRD’s Trade Facilitation Programme (TFP).
UBCI is the first bank with which the EBRD has signed a risk-sharing facility in the southern and eastern Mediterranean (SEMED) region. Under this facility, the EBRD will take a portion of the risk of certain loans made by UBCI to companies operating in Tunisia. The facility allows the EBRD’s partner banks to increase the size of their lending to local firms.
The European Union (EU) is providing grant support for this transaction, as part of an overall €27.6 million in funding channelled through the EBRD to boost financial inclusion in the SEMED region.*
Sir Suma Chakrabarti, President of the EBRD, said: “We are very pleased to build on our successful partnership with UBCI through the signing of this new financial package. It will further support the expansion of private businesses’ access to much-needed funding, strengthen the Tunisian business community and also support the local economy through the creation of new employment opportunities. In addition, the international trade finance line will contribute to the development of international and regional trade with Tunisian companies.”
Pierre Beregovoy, CEO of UBCI, said: "Now we have signed these three agreements with the EBRD, UBCI has strengthened its capacity to lend to Tunisian SMEs for their investment funding needs and international trade. Signing the risk-sharing facility will also allow UBCI to scale up its operations and fund large investment projects, while staying in line with regulatory standards on risk concentration.”
For Mr Beregovoy, the package demonstrates UBCI's strong involvement in developing the fabric of the Tunisian economy, and confirms his commitment to stepping up the bank's support for Tunisian businesses at a crucial stage for the national economy.
According to the CEO, the package also reflects international lenders’ confidence, particularly that of the EBRD, in UBCI's financial strength and expertise, both nationally and internationally through its affiliation with the BNP Paribas Group.
Mr Patrice Bergamini, the EU Ambassador in Tunisia, stated: “I am delighted to see that these funds will allow additional finance to help SMEs grow and export. This grant, provided by the EU regional Initiative for Financial Inclusion, is part of comprehensive EU support for the private sector. I am referring in particular to a major programme of €90 million to boost competitiveness and exports – the Programme d'Appui à la Compétitivité et aux Exportations (PACE). I can only praise the work of the EBRD and its full commitment to building a successful and dynamic SME sector. Our common objective is to create jobs and increase the confidence that young people have in their future.”
The EBRD Trade Facilitation Programme was established in 1999 to promote and facilitate international trade to, from and within the regions where the EBRD invests. Guarantees are provided to international commercial banks, thereby covering the political and commercial payment risk of transactions undertaken by participating banks (issuing banks) in the EBRD’s countries of operations.
Since September 2012, when EBRD operations began in Tunisia, the Bank has invested €540 million through 31 projects in the country. Supporting the regional development of the country, outside Tunis, is a special priority for the Bank and the EBRD therefore opened a second office in October 2016, in Sfax.
* The EU Initiative for Financial Inclusion is a comprehensive programme to help micro, small and medium-sized businesses in the southern and eastern Mediterranean region to become more competitive and grow. It provides finance and know-how to boost development and create jobs.