Tunisia: Financial markets an alternative method financing for SMEs
Tunisian small to medium-sized enterprises (SMEs), which represent 95 percent of businesses, often have difficulties accessing credit as it is granted upon guaranties required by lenders.Many SMEs struggle to provide these guaranties, especially in their start-up phase.
According to a 2011 report from the Union of Arab Banks and the World Bank called The status of lending in the Middle East and North Africa region, the ratio of loans to SMEs compared with all loans in Tunisia is 15 percent, while in comparison, this figure is 24 percent in Morocco.
Experts believe this situation requires the creation of alternative methods of financing SME projects, such as financial markets.
The Tunisian stock market currently has a low participation in the country's economic activity, only accounting for six percent of investment financing, with a market capitalisation representing 24 percent of the gross domestic product, La Presse newspaper reports.
However, the financial markets represent a viable alternative for SMEs, according to finance specialist Seydina Tandian.
He told Sud Quotidien newspaper that financial markets bring international awareness to SMEs, offering companies the chance to leverage funds on the financial markets at a better cost than that offered by banks.
The Tunisian government could follow Morocco's example, where the government and the Casablanca stock exchange (BVC) have introduced several mechanisms to improve SME financing, such as tax incentives with an exemption of up to 50 percent on corporate tax on the three first years of listing.
BVC also provides a grant in order to reduce the costs of introduction on the stock market.