Tunis/Tunisia — The contribution of investment funds is extremely important in matters of financing enterprises, particularly SMEs and startups, especially when other financing sources are lacking, concluded a webinar organised by the Confederation of Citizen Enterprises (CONECT) in collaboration with the United States Agency for International Development (USAID) Tunisia Jobs programme on the theme: "Which funding tools for the financial restructuring of Tunisian SMEs impacted by the COVID-19?."
This webinar aimed at informing Tunisian enterprises on existing financing solutions outside the traditional channels, offered the opportunity to present the digital marketplace "JoussourInvest," whose objective is to bridge the gap between enterprises seeking financing and investment funds and to facilitate financing through the digitalisation of the procedure and to the restructuring funds "Inkadh" and "Mourafek" dedicated to supporting the restructuring of distressed enterprises.
CONECT President Tarak Cherif talked about the recurrent problem of access to financing faced by Tunisian enterprises, especially SMEs and startups, despite the high number of Tunisian banks, which are mostly commercial banks
This problem is due to the lack of liquidity at the level of banks which often tend to finance the State through the BTA, public companies under the guarantee of the State and large groups with the necessary guarantees, and the very small number of investment funds in Tunisia, he said.
Cherif pointed out that investment funds bring a different approach to financing as they pay much more attention to the project idea and the viability of the business model rather than to the physical collateral available to enterprises seeking financing.
The official voiced wish that the number of investment funds will increase, that these funds will become more specialised and that they will have a better presence in inland regions where the potential for wealth creation is enormous but poorly exploited.
He also considered that financing via investment funds helps Tunisian enterprises avoid the prohibitive interest rates applied by banks, recalling that the MMR in Tunisia is double that applied in Algeria and four times that applied in Morocco.
Participating in this virtual meeting, Ines Allouche, Team Leader at USAID Tunisia Jobs, recalled that JoussourINVEST is the first digital marketplace in Tunisia. It is an initiative of the Deposit and Consignment Office (CDC), the Tunis Stock Exchange (BMVT) and the Tunisian Association of Capital Investors (ATIC) which was developed thanks to the USAID Tunisia JOBS programme.
Launched in September 2020, JoussourINVEST.tn aims to connect investors and SMEs seeking capital financing, in order to undertake a financial restructuring following the COVID-19 crisis, or to strengthen and support their growth.
This platform helps digitalise the submission of equity funding applications and the matching of equity investors with SMEs seeking funding, and facilitates the exit of equity investors for additional investments in SMEs.
Allouche underlined that "the official launch of JoussourInvest had taken place on September 24, 2020. On April 7, 2021, 57 investors have been active and more than 2,100 SMEs have registered. 328 capital investment requests have been submitted via JoussourInvest."
In this regard, 2 cash-out operations have been reported for an amount of 7 million dinars (MD) and 42 applications are in the due diligence phase. Some 6 transactions have been concluded worth 12 MD and 6 transactions are in the process of raising funds for 16 MD."
Taking the floor, Jihen Ben Fadhel from MAC Private Management, presented the "Inkadh" Fund, initiated by the stock market intermediary Mac SA and Amen Bank and managed by Mac Private Management for a total amount of 50 MD. "Inkadh" which is the first turnaround fund in Tunisia was launched in December 2020.
"The principle of this kind of fund is to provide capital to distressed enterprises when other sources of financing are lacking. It targets existing enterprises with management, vision or strategic problems, and aims to finance their recovery plans and redefine their development strategies, through a participation in the capital and a shareholding pact," she said.
She added that "contrary to the turnaround funds, across the world, which generally require a majority participation in the enterprise to redefine its development strategy, the Inkadh Fund settles for a minority participation in the beneficiary enterprise and operates in collaboration with a business expert to act at the level of the governance of the enterprise, to steer its strategy and to initiate its restructuring. Managing Director of Zitouna Capital Mounir Fakhet presented the "Mourafek" Fund managed by the Zitouna Capital, for a total amount of 40 MD. This fund is dedicated to fund the restructuring of VSEs and SMEs impacted by the COVID-19 pandemic. "Sharia-compliant," this fund targets established enterprises that have been impacted by the pandemic, but have viable business models and operate in promising sectors.
It operates by taking a minority stake in the capital of beneficiary enterprises in order to redress their financial situation and balance their working capital. It also intervenes in the governance of the target enterprises through a presence in the management structures.
In response to the COVID-19 crisis in Tunisia, CDC, with the support of USAID, invested up to 40% in these two restructuring funds. These funds will provide financing grants of 1 to 5 million dinars per SME. This funding will help these SMEs restructure their activities and position themselves for post-crisis growth. The intervention period of these two funds within the beneficiary enterprises is 5 years in average.