Promotion of the microfinance sector
Project descriptionTitle: Promotion of the microfinance sector
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Lead executing agency: Tunisian Ministry of Finance, Autorité de Contrôle de la Microfinance
Overall term: 2012 to 2015
Only around one third of people living in Tunisia have their own bank account. Most of the population has no access to services from registered financial institutions. Informal sources of financing accessible to everybody, and especially to low-income earners and households, are typically expensive, not subject to controls and thus inherently risky.
The social and economic exclusion of broad sections of the population, especially young people, played a key role in the political and social unrest in Tunisia, and continues to jeopardise social peace.
Tunisia's Ministry of Finance adopted a national strategy to develop the microfinance sector in 2011. This strategy aims to create a socially responsible, sustainable microfinance system. Better access to financial services throughout the country should help to combat financial exclusion, improve regional development and stimulate the economy. Since a new microfinance law took effect in November 2011, Tunisian and foreign microfinance providers have for the first time been able to apply for a licence to offer microfinance services in Tunisia; initially only micro loans.
Regulatory and institutional frameworks have been created to enable stable and sustainable development of the microfinance sector. A supervisory board that licences and oversees microfinance institutions has been established. Customers are protected in line with international standards.
The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH is working on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) to advise the Ministry of Finance as it implements the microfinance strategy. The project focuses on the following areas:
Establishing a supervisory authority to oversee the microfinance sector. The main focus of the project is establishing and supporting a public body that will be responsible for licensing and supervising microfinance institutions.
Fostering and improving the legal and institutional framework and sector infrastructure. Developing a stable, sustainable microfinance sector requires supporting institutions. This includes a credit information system for sharing customer data, thereby preventing borrowers from taking on too much debt. There are also plans for the Tunisian side to set up a market observation institution.
Results achieved so far
The supervisory authority for the microfinance sector started operating at the end of 2012 and has since been handling enquiries from microfinance providers, most of them active on the international stage, that wish to acquire a licence for Tunisia. The project has supported developments to date with technical, logistic and financial measures and is continuing to help train the Tunisian professionals and manage the supervisory authority as well as to build up networks and cooperative relationships at Tunisian and international level.
The microfinance supervisory authority has received a number of applications for licences for new microfinance institutions, some of them financed by international investors. In line with the times, these institutions see themselves as professional banks for microfinance customers. Their establishment is backed by globally operating specialist organisations that combine their international expertise with the local know-how of young Tunisian professionals.
In cooperation with international central bank advisors, GIZ is developing a modern bank supervision procedure for the newly emerging microfinance sector.
Since March 2014 the Tunisian microfinance supervisory authority has been a member of the Alliance for Financial Inclusion (AFI), a global network of financial policy-makers from developing countries and emerging economies. The Tunisian partners of the project, such as the Ministry of Finance and the microfinance supervisory authority, also feel committed to the goal of financial inclusion, i.e. improved access for the low-income population to financial services.