Sometimes the poor relation of investment, more often left to their own devices, small and medium-sized enterprises (SMEs) rarely find the means to fulfill their vocation, which is to generate wealth, create jobs and, above all, assert themselves as the companies that make up the vast majority of Tunisia’s economic fabric.
In order to do so, and to overcome the indifference of the banking sector and the obstacles put in their way by other financiers, SMEs are naturally looking for other sources of finance, sometimes with more or less good results.
The Caisse des Dépôts et des Consignations (CDC) seems to have come at just the right time, having launched a 200-million-dinar credit line for subscribing to investment funds for the restructuring and revitalization of SMEs in difficulty, the CDC announced on Thursday in its capacity as the state’s financial arm.
This line, 120 million dinars of which will be financed by the Arab Fund for Economic and Social Development (FADES), consists of a specific aid scheme for SMEs proposed as part of the program for the revitalization of the Tunisian economy adopted by the government, said the CDC’s managing director, Néjia Gharbi, at a workshop entitled “Private equity: state of play and new programs at the CDC”.
She added that the remaining amount (80 million dinars) would be raised by the CDC, which would contribute 40% of the 20 funds earmarked for this purpose.
Gharbi pointed out that the aim was to provide SMEs with liquidity and financial resources to ensure their financial stability while enabling them to develop their activities.
This financial support will contribute to solving the problems of undercapitalization and over-indebtedness of SMEs, especially those that no longer have access to bank financing,” said Karim Bououni, head of the CDC business unit.
The aim is also to ensure that SMEs with development potential have access to high-quality financing, to provide them with the means to improve their financial situation, to mobilize financing and to ensure financial stability and the development of the economic fabric of SMEs,” he added.
Supporting the resilience of SMEs
The CDC has also just launched the “Impact” fund, which aims to support actors in the regions in order to promote regional development, contribute to political stability, create clusters and strengthen regional centers of expertise, reports TAP.
With a budget of 100 million dinars, this fund is CDC’s response to Tunisian companies operating in the regions. The aim is to help them overcome development imbalances and structural problems and ensure a growth path by stimulating investment, said Koubeyel Elabed, manager at the CDC.
The CDC is in the process of raising funds and the first “impact” operations will be implemented thanks to financing currently under discussion with the World Bank (WB).
The “Impact” interventions will focus on companies that promote the reconciliation of financial, social and environmental aspects.
The aim is to promote value creation, chain upgrading and the creation of decent, sustainable, higher value-added jobs by focusing on regional sectors and centers of excellence.
What about relay funds?
In addition to this fund, CDC has established the “Relay” fund, which aims to provide an exit solution (cash-out) for other investment funds to continue supporting the companies in their portfolios.
With a target size of 100 million dinars, this mechanism, which is also in the fundraising phase, will focus on SMEs that have demonstrated their resilience and have a strong potential for recovery and growth.
During the 2012/2022 period, the CDC has actively supported SMEs through subscriptions to various investment funds,” said the CDC’s CEO.
Thanks to subscriptions totaling 446 million dinars to 26 funds by the end of 2022 (of which 21 local and 5 international), CDC has contributed to the creation of management companies and investment funds, thereby strengthening the private equity market in Tunisia, she recalled.
A total of 188 projects have been created thanks to the Fund’s investments, including 80 in regional development zones. These investments have created and maintained 21,481 sustainable jobs, including 6,752 for women and 5,716 for young people.