A Special Advertising Section on Tunisia

Tunisian Solidarity Bank brings hope to small businesses
Micro-credit program creates new entrepreneurs

The Banque Tunisienne de Solidarite (BTS) will celebrate its first year in operation on December 22, 1998. Tunisians can be proud of this newly created institution that has already approved over 4,000 small business loans.

BTS held its first general meeting following a presidential edict in May 1997, and was officially launched the following December. The bank's objective is to encourage economic development based on the principles of self-initiative, self-employment and creativity. It is achieving this mission by lending to credible, profitable, private micro-projects.

Adnane Mehdi Zbiss, principal engineer/manager of BTS, is not surprised that Tunisians have not quite made the distinction between the Bank and the National Solidarity Fund, which is also known as the 2626 fund.

"These two institutions may be independent of each other," says Zbiss. "But both are mechanisms for promoting solidarity."

Abdellatif Saddem is at the helm of BTS, serving as both president and general manager. Saddem and Zbiss exude such a high level of energy and enthusiasm when discussing the bank that you realize immediately that they truly believe in what they are doing. With a total staff of 80 that has so far handled over 10,000 credit requests, energy and enthusiasm are almost a prerequisite for the mammoth workload.

Klilifi Hafedli, chief representative of BTS outside of Tunis, says that as many as 30 people queue up outside his office each morning to obtain information or to follow-up with loan requests.

Despite the hectic conditions, the BTS staff meticulously evaluates each case, and BTS representatives make site visits to every project to ensure that all criteria are being met. BTS staff is projected to increase to about 140 to meet the growing demand for the micro-credit program.

Individuals whose loans are approved are engaged in some form of small business that requires a skill, experience, or a university degree or vocational training certificate. A profitable project proposal and proper management of the project are also indispensable criteria.

The bank understands that most potential clients have insufficient assets for even a small loan from a traditional bank. BTS is willing to loan up to US $9,500 using only a good proposal as collateral.

Meanwhile, the loan conditions take into consideration the circumstances of fledgling enterprises. The interest rates on the micro-credit loans are rarely above five percent, and the loan repayment schedule of up to seven years is also generous.

BTS sometimes approves loans that other commercial banks deem too risky. Bhar Messaad, 24, of Hammam-Lif - a neighboring town, just south of Tunis - had neither the collateral nor the capital to start his own jewelry business. What he did have was a sound business plan, and the seriousness and initiative to start his own business. With a two-year vocational training diploma, and an apprenticeship under his belt, he was recently approved for a US $4,000 credit from BTS.

"Without this credit, I would not have been able to open my own business," explains Messaad.

Before the creation of BTS, he would have been obliged to wait several years while working for someone else and saving his money. Messaad says that he is anxious to pay off this credit, and then apply for more credit to grow his business.

Aissa Oddour, also of Hammam-Lif, is in a different situation. He is an experienced and already established specialist in installing all types of flooring from carpets to marble. Recently, he decided to extend his business to meet his clients' requests to refurbish and clean floors that he had already installed.

Oddour has borrowed US $4,000 from BTS for new equipment needed to grow his business. Without the BTS loan, he would not have had the means to buy the equipment.

"If someone knows how to manage a project, he can do a lot of things with this type of loan," says Oddour.

The BTS has also become the first bank in Tunisia to encompass a truly national and diversified shareholding. The majority of the bank's 225,000 shares are privately held, and 62 percent of the bank's US $27 million in capital is held by the general public.

The BTS has come a long way in less than a year because of the hard work of the entire staff, and because of Saddem's managerial skills. Saddem says that by next year, he would like to have 8,000 to 10,000 loans approved, and he would like to delegate more responsibility to the regional administrative level.

Given its impressive success over the last year, BTS will probably not only meet these goals, but also exceed them.

"If 80 percent of the projects succeed, then the BTS will have accomplished its goals," explains Saddem.