New Financing Mechanism for Individuals, Project Holders, and Small Businesses in Tunisia
A new financing mechanism for individuals, project holders, and small businesses is being gradually implemented in Tunisia. A decree published in the Official Journal of the Republic of Tunisia (JORT) sets out the rules for operating honor-based microfinancing lines, a system that relies on interest-free and unsecured financing.
Objective
The idea is to create a dedicated envelope for financing small-scale projects and economic activities that often face difficulties in accessing traditional credit. To achieve this, each bank must open a specific account called the "honor-based microfinancing line account" to manage the amounts allocated to this mechanism.
Eligible Beneficiaries
The decree specifies the beneficiaries of these financings, including:
- Individuals
- Micro-project holders
- Small and medium-sized enterprises (SMEs)
- Community companies
Eligible Projects
The text defines the categories of projects that can benefit from this support. A micro-project is considered an activity with a total investment of up to 150,000 dinars, including working capital needs. For SMEs, the mechanism concerns companies with investments, including creation and expansion, between 150,000 dinars and 15 million dinars.
Financing Conditions
The objective is to cover several profiles, from individuals seeking limited financial support to companies needing support to develop their activities. The main changes introduced by this mechanism concern the access conditions. The financings granted under the honor-based microfinancing lines are short-term loans, repayable over a maximum period of 2 years, without interest. Beneficiaries can also obtain a grace period of up to 6 months. Additionally, banks cannot demand guarantees or securities, regardless of their nature.
Financing Limits
The decree sets the financing limits:
- Up to 25,000 dinars for SMEs and community companies
- Up to 10,000 dinars for micro-project holders
- Up to 5,000 dinars for individuals to cover consumption needs
Bank Effort
The expected effort from banks is also specified. Except for establishments whose statutes limit the field of intervention, each bank must allocate at least 50% of the available funds to SMEs and community companies.
Processing and Response Time
The decree sets precise deadlines to avoid blocking requests. Banks must examine files within a maximum of 10 working days from their submission. The response must be communicated to the applicant by a means leaving a written record. In case of refusal, the bank must explain the reasons for its decision. The study of files cannot generate any fees or commissions for applicants.
Control Mechanism
The mechanism provides for a control system. The auditors of the banks must establish an annual report on the respect of the obligations related to these financing lines. This report must be transmitted to the Ministry of Finance and the Central Bank of Tunisia (BCT) within a maximum of 3 months. In case of non-compliance with the rules set by the decree, the BCT can intervene and apply the sanctions provided for by the Commercial Code.
Conclusion
Through this mechanism, the authorities aim to mobilize part of the resources of the banking sector towards small-scale projects, often considered too risky by traditional financing channels. It remains to be seen how this mechanism will be applied in the field and what its real capacity will be to meet the needs of entrepreneurs, young project holders, and small businesses.
