From 2011-13, FSVC implemented a highly successful program in Tunisia, funded by the U.S Department of State, to expand Small and Medium Enterprises (SMEs) access to finance through improvements in the venture capital sector, financial institution practices and the legal and regulatory framework.

Tunisian SMEs and entrepreneurs play a vital role for economic growth and job creation. To improve their access to finance, FSVC implemented 39 activities to expand access to venture capital for high-growth entrepreneurs, stimulate credit to SMEs, reduce gap between entrepreneurs and fund providers, and support key regulatory initiatives to improve the entrepreneurial ecosystem.

  • Expand access to venture capital for entrepreneurs: FSVC partnered with the Tunisian association of venture capital and the CDC, a government-backed institutional investor, to improve the capacity of venture capital funds to screen and monitor their SME investments and remove regulatory impediments preventing venture capital to be efficiently allocated for high-growth, innovative entrepreneurs.
  • Stimulating credit to SMEs: FSVC assisted several leading private and government-owned banks in the areas of risk management, SME product and service development, and internal process improvement to stimulate the flow of credit for SMEs.
  • Reducing gap between entrepreneurs and fund providers: FSVC helped streghen the capacity of local business incubators and centers to provide value-added services to help entrepreneurs launch their businesses successfully.
  • Supporting key regulatory initiatives: FSVC engaged in a number of strategic initiatives with key regulators to support entrepreneurship and SME growth.  FSVC’s work focused on the creation of a government-owned pre-seed fund, the development of credit information for SMEs, and the improvement of Tunisia’s SME stock exchange regulations.

Program Impact

  • The venture capital association published a model of a shareholders agreement that has become the industry standard for the negotiations between entrepreneurs and venture capital funds.
  • Innovative financial instruments, such as convertible bonds, have been enacted by policy-makers to facilitate venture capital investment.
  • Since 2013, CDC has invested approximately 40M$ which benefited to 59 SMEs, including several in undeveloped areas.
  • 11 SMEs were able to raise capital successfully through the SME stock exchange thanks to more attractive regulations.
  • The central bank of Tunisia is launching a credit rating bureau to allow banks better assess the creditworthiness of SMEs.