Case Study

Generating Job Opportunities through Finance and Investment in Tunisia

Unlocking Growth through Inclusive Finance and Strategic Investment
Finance and Investment

The Challenge

In 2018, Tunisia faced unemployment rates of over 15 percent, with significantly higher rates among university-educated youth (31 percent) and in Tunisia’s central and southern regions (up to 48 percent). Tunisia’s financial system historically underserved micro, small and medium sized enterprises (MSMEs), a critical segment of Tunisia’s economy. The COVID-19 pandemic and resulting deteriorating access to capital only further increased economic volatility throughout the country.

Our Solution

Public and Private Sector Collaboration to Enhance Financing Capabilities and Support Business Growth

Chemonics has been a dedicated partner in Tunisia’s economic growth since 2014, collaborating with public and private sector entities and local stakeholders through various initiatives to support economic growth through increase financial intermediation. In Tunisia, we introduced numerous innovations in debt, leasing, and equity financing – whether in digital financial services or blended finance.  Our approach combined loans, guarantees, and grants to enhance the financing capabilities of financial partners and support business growth:

  • Capital Mobilization: We designed blended finance models in partnership with microfinance institutions like BaoBab and Advans Tunisie. These partnerships mobilized $40.7 million in financing for over 18,000 micro and very small businesses, particularly in Tunisia’s south and central regions.
  • Product Development: We developed Dhamen Express, a financial tool that facilitated $11.4 million in financing by streamlining the loan guarantee process, making it easier for financial institutions to extend credit to riskier borrowers.
  • Digital Financial Services: We developed digital platforms to modernize financial access, including:
    • NEO BTE: a virtual banking branch for SMEs, reducing the need for in-person visits and streamlining financial interactions
    • JoussourInvest: a digital investment matchmaking platform between SMEs and private investors that helped structure deals and increase liquidity in Tunisia’s private equity ecosystem. JoussourInvest supported over $21.7 million in financing and enabled transactions like a $66,000 investment for electric scooter startup Kaco Motor
    • net: We developed this platform in partnership with Tunisie Leasing and Factoring (TLF) to enable businesses to digitally submit and track lease applications. By mid-2024, it had reached 2,648 users and was projected to increase lease financing to SMEs by over $2.15 million.
  • Investment Structuring Support: We helped structure 115 investment deals totaling $155.6 million, including $95.5 million in direct support to 42 businesses.
  • Financial Services Advisory Services: We trained local financial service providers in areas such as cash flow analysis, risk management, and product development. This helped banks and MFIs better serve MSMEs, especially in rural and underserved regions. We also worked with financial services providers to prioritize financial inclusion with strong results – 38% of MFI beneficiaries were women-run businesses and 32% were youth-run businesses among our partners.

The Impact

Access to Finance and Sustainable Business Growth in Tunisia

Chemonics’ long-term engagement in Tunisia has contributed lasting firm growth. Notably:

  • Increased Financing for MSMEs: $458.7 million in financing was facilitated for 41,692 medium, small and microenterprise enterprises traditionally excluded from financing opportunities, contributing to job opportunities and economic growth.
  • Growth in Business Revenue: The businesses that we worked with in Tunisia experienced a 19.6 percent average increase in sales.
  • Increased employment: Our efforts supported over 57,000 companies across all governates and contributed to more than 87,000 full time jobs created. Over 3,000 youth were matched with internships at leading companies.
  • Economic Recovery: Business growth plays a significant role in increasing the value of economic output and GDP growth. In 2021, Tunisia’s GDP increased 4.61 percent, a strong recovery considering the sharp economic decline triggered by the COVID pandemic among other factors.

By leveraging our expertise in blended finance, digital financial services, investment structuring, and capacity building for financial institutions, while also prioritizing inclusive access to finance, we have demonstrated how strategic partnerships with existing financial services providers and innovative interventions lead to increased financial intermediation that results in economic benefits. This case study highlights our ability to deliver finance solutions that meet the unique needs of our clients and contribute to long-term, sustainable growth.