MICROCAPITAL BRIEF: European Investment Bank, Tunisian-Kuwaiti Bank, Tunis Entrepreneurship Network Plan to Loan $52m to Tunisian Micro-, Small, Medium-sized Enterprises (MSMEs)

The European Investment Bank (EIB), the Luxembourg-based long-term lending bank of the European Union (EU); the Banque Tuniso-Koweitienne [Tunisian-Kuwaiti Bank] (BTK), a financial institution founded by the governments of Tunisia and Kuwait; and the Tunis Entrepreneurship Network (TEN), an association that assists entrepreneurs and small businesses in Tunisia, reportedly have announced a draft agreement to finance micro-, small and medium-sized enterprises (MSMEs) in Tunisia. It is expected that the final agreement, with a total value of EUR 40 million (USD 51.6 million), will be signed by the end of 2014.

Mr Houssein Mouelhi, the chief executive officer of BTK, reportedly said that EIB would disburse a loan of EUR 20 million (USD 25.8 million) to BTK. The institution will on-lend this amount plus an additional amount of EUR 20 million (USD 25.8 million) to Tunisian MSMEs. Microenterprises will benefit from 10 percent of the available credit line and will be eligible for unspecified preferential interest rates. TEN will shortlist candidates for the funding based on unspecified selection criteria. BTK will select the final beneficiaries, while TEN will provide “professional assistance”[2] to the beneficiaries. It is anticipated that the credits will be disbursed for a period of 10 years and the funding will assist both start-up and pre-existing MSMEs to grow.

Mr Philippe de Fontaine Vive, vice president of EIB, reportedly said that end-borrowers will be required to exhibit both “fiscal transparency and compliance with environmental requirements”[1].

In Tunisia, 90 percent of economic activity is attributed to MSMEs, 15 percent of which are funded by traditional banks as of 2014. Further information on BTK and TEN is available in French on the websites of the organizations. The total annual lending portfolio of EIB was EUR 71.7 billion (USD 95.8 billion) as of 2013.

By Alíz Crowley, Research Associate

About European Investment Bank (EIB)

The European Investment Bank (EIB) was created in 1958 and serves as the long-term lending bank of the European Union as of 2014. In addition to supporting projects in EU member states, its main priorities include financing investments in likely future member states and EU partner countries, principally in the area of small and medium-sized enterprises. According to its website, “the EIB operates on a non-profit maximizing basis and lends at close to the cost of borrowing.” The total annual lending portfolio of EIB was EUR 71.7 billion (USD 95.8 billion) as of 2013.

About Banque Tuniso-Koweitienne [Tunisian-Kuwaiti Bank] (BTK)

The Banque Tuniso-Koweitienne [Tunisian-Kuwaiti Bank] (BTK) (formerly known as Tunisian Kuwaiti Development Bank) is a financial services company based in Tunis, Tunisia. The organization was founded in 1981 based on a bilateral agreement between the governments of Tunisia and Kuwait. In addition to a range of financial services, the bank and its subsidiaries also offer real estate and tourism services. As of 2014, BTK has 27 branches and approximately 370 employees. BTK’s shareholders include BPCE (Banque Populaire and Caisse d’Epargne) International et Outre-mer (60%), the Tunisian government (20%) and the Kuwait Investment Authority (20%). Further information on BTK is available on the organization’s website in French.

About Tunis Entrepreneurship Network (TEN)

Based in Tunis, the Tunisian Entrepreneurship Network also has offices in Belgium, France, Italy, Morocco and Switzerland. As of 2014, TEN has 130 members and the goal of providing professional support to micro-, small and medium-sized enterprises and young entrepreneurs in Tunisia. Further information on TEN is available on the organization’s website in French.

Sources and Additional Resources

[1] Africanmanager.com, Tunisia: EIB, BTK to provide SMEs up to 92 million dinars

[2] Finacorp.net, TUNISIA – EIB and BTK to finance SMEs and VSEs through a EUR40mn loan

[3] Tunis Entrepreneurship Network, Key figures of our network

[4] Tunisian-Kuwaiti Bank (BTK), website

MicroCapital, July 30, 2014, Sanad Fund for MSME Lends $9m to Tunisie Leasing to Support Micro-, Small, Medium-sized Enterprises (MSMEs) in Tunisia

MicroCapital, July 3, 2014, European Bank for Reconstruction and Development (EBRD), International Cooperation and Development Fund of Taiwan (TaiwanICDF) Loan Tunisie Leasing $14m to Fund Micro-, Small, Medium-sized Enterprises (MSMEs) in Tunisia

MicroCapital, July 26, 2013, European Investment Bank (EIB) Loans $92m to National Microfinance Bank (NMB) of Tanzania for Micro-, Small, Medium-sized Enterprises

MicroCapital Universe Profile: European Investment Bank

MicroCapital Universe Profile: Banque Tuniso-Koweitienne [Tunisian-Kuwaiti Bank] (BTK)

MicroCapital Universe Profile: Tunis Entrepreneurship Network (TEN)

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