MICROCAPITAL BRIEF: World Bank Group Loans $100m for MSMEs via Central Bank of Tunisia, Partner Banks

The World Bank Group’s International Bank for Reconstruction and Development (IBRD) recently loaned USD 100 million to the government of Tunisia to benefit micro-, small and medium-sized enterprises (MSMEs). The goal of the project, according to Laurent Gonnet, Senior Financial Sector Specialist for the World Bank, is to “improve Tunisian MSMEs’ access to funding and allow those which earlier proved to be creditworthy to keep this access, while ensuring that viable MSMEs that were hit by the Revolution be able to recover their capacity to continue their repayment in a sustainable way” [1]. The funds will be disbursed by the Central Bank of Tunisia for on-lending via retail banks, which will be selected based on their non-performing loan ratios and their cash position as it relates to both contributing to the project -and maintaining adequate loan-loss provisions. The IBRD line of credit is payable over 15 years with an interest rate of 1 percent.

USD 15 million of the total will go to small and medium-sized enterprises (SMEs) over 12 years with a 3-year grace period. This portion of the loan is sourced from Consignment and Deposit Fund, which is backed by the French government [1]. An additional USD 25 million of the total is earmarked for microenterprises.

The loan builds on a line of credit in the amount of USD 50 million that was opened for similar purposes by IBRD for the government of Tunisia in 2012.

In related news, the Central Bank of Tunisia and the country’s microfinance control authority have agreed to work to establish a credit bureau specifically to track microloans.

By Jeff Pierce, Research Associate

About the International Bank for Reconstruction and Development (IBRD)

Founded in 1944 in an effort to help Europe recover from World War II, the International Bank for Reconstruction and Development (IBRD) is one of two institutions that make up the World Bank, is one of four members of the World Bank Group. IBRD works with middle-income and creditworthy poorer countries to promote sustainable, equitable and job-creating growth, reduce poverty and address issues of regional and global importance. IBRD has 188 member countries.

Sources and Additional Resources:

[1] Zawya: “WB grants Tunisia USD 100 million to support micro, small and medium enterprises” by Tunis-Afrique Presse, https://www.zawya.com/story/WB_grants_Tunisia_USD100m_to_support_micro_small_and_medium_enterprises-ZAWYA20150212043754/

MicroCapital Universe Profile: The World Bank Group

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The+World+Bank+Group

MicroCapital Universe Profile: International Bank for Reconstruction and Development

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Bank+for+Reconstruction+and+Development+%28IBRD%29

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

Similar Posts: