In support for Tunisia to assist its Small and Medium Enterprises (SMEs) financially, the World Bank has approved a $120 million loan according to a press release by the World Bank.

The project which is to support Tunisian SMEs for economic recovery is aimed at addressing the primary long term liquidity challenges faced by Tunisian firms by financing long-term lines of credit that will be on-lend by the Ministry of Finance to engaging financial institutions for lending to eligible SMEs.

According to Alexandre Arrobbio, the World Bank Country Manager for Tunisia, “the covid-19 pandemic and war in Ukraine have caused macroeconomic imbalances in Tunisia, which have exacerbated challenges faced by SMEs and weakened their performance and financial health”, hence this project.

To this end the project will provide a two means of credit, which will be a facility of $24.5 million used to reschedule existing loans of viable SMEs to longer maturities to ease their debt burden and a credit of $93.7 million to provide new long-term loans to viable SMEs.

The remaining part of the loan $1.5 million will be dedicated to project implementation support, monitoring, and evaluation. 

A memorandum of understanding was signed between the Ministry of Finance and the Central Bank of Tunisia to strengthen SOTUGAR’s governance and supervision, a public partial credit guarantee mechanism.

The support to SMEs by the World Bank was feasible due to cooperation with other partners like the Agence Francaise de Developpement (AFD) and the European Investment Bank (EIB).