Tunisia: Microfinance to Boost Youth Employment
20 September 2012
Read by 1469 persons
(Lapresse.tn) - A program to encourage micro-financing of businesses will be implemented to stimulate youth employment and allow them to become self-sufficient. This is thanks to an agreement signed this year between the Tunisian government and the Islamic Development Bank.
A loan worth US \$50 million (approximately 75 million Tunisian dinars) - repayable over 15 years with a 3-year grace period - will be unlocked for Tunisia with an annual interest rate of 3%
This program aims to improve the living standards of unemployed people, especially those with higher education or vocational training diplomas, as well as small producers and artisans who will benefit from assistance to integrate into the workforce.
The Tunisian Solidarity Bank (BTS) will be responsible for implementing this program by providing micro-loans to those wishing to set up their own businesses to create micro-enterprises.
Sound financial situation
Note that the Tunisian government had presented a program to strengthen employment through private initiative for young people, approved by the Bank.
The BTS, the executing party, is expected to invest the amount of the contracted loan over a period of three years from the date of the funds being unlocked.
Each project will undergo a profitability study to guarantee added value to the investment. Investments in approved projects will be made based on the funds available in the program account. The Islamic Bank will be informed about the approved projects and the amounts unlocked for their implementation.
In addition, the government must periodically submit a detailed report on the approved projects and the amounts spent to implement them, as well as projects under approval.
The Tunisian government must bear all direct and indirect costs necessary for the execution of this program in accordance with the terms of the agreement signed between the two parties.
After financing all approved projects or after a period of three years, the government will submit to the Islamic Bank a report on the total amounts invested and the funds to be received from these projects, in other words, the amounts repaid from the granted loans.
The Islamic Bank will open an account in its name where the amounts due will be deposited. Late repayment is subject to late payment penalties.
Precautions should therefore be taken by the contracting party by carrying out a meticulous evaluation for any project to be financed - which must comply with Islamic Sharia law - taking into account its quality and potential risks.
For example, it is necessary to ensure that the beneficiary has a sound financial situation and is able to repay the amount of the loan contracted.
Hence the need to provide for financial audits to honor repayment commitments. Guarantees must be available to allow the government to recover all financing in case of non-payment by the beneficiary, who is required to present sufficient collateral corresponding to the principal of the contracted loan.
Reussirbusiness.com
Published September 18, 2012.
Online September 20, 2012.
A loan worth US \$50 million (approximately 75 million Tunisian dinars) - repayable over 15 years with a 3-year grace period - will be unlocked for Tunisia with an annual interest rate of 3%
This program aims to improve the living standards of unemployed people, especially those with higher education or vocational training diplomas, as well as small producers and artisans who will benefit from assistance to integrate into the workforce.
The Tunisian Solidarity Bank (BTS) will be responsible for implementing this program by providing micro-loans to those wishing to set up their own businesses to create micro-enterprises.
Sound financial situation
Note that the Tunisian government had presented a program to strengthen employment through private initiative for young people, approved by the Bank.
The BTS, the executing party, is expected to invest the amount of the contracted loan over a period of three years from the date of the funds being unlocked.
Each project will undergo a profitability study to guarantee added value to the investment. Investments in approved projects will be made based on the funds available in the program account. The Islamic Bank will be informed about the approved projects and the amounts unlocked for their implementation.
In addition, the government must periodically submit a detailed report on the approved projects and the amounts spent to implement them, as well as projects under approval.
The Tunisian government must bear all direct and indirect costs necessary for the execution of this program in accordance with the terms of the agreement signed between the two parties.
After financing all approved projects or after a period of three years, the government will submit to the Islamic Bank a report on the total amounts invested and the funds to be received from these projects, in other words, the amounts repaid from the granted loans.
The Islamic Bank will open an account in its name where the amounts due will be deposited. Late repayment is subject to late payment penalties.
Precautions should therefore be taken by the contracting party by carrying out a meticulous evaluation for any project to be financed - which must comply with Islamic Sharia law - taking into account its quality and potential risks.
For example, it is necessary to ensure that the beneficiary has a sound financial situation and is able to repay the amount of the loan contracted.
Hence the need to provide for financial audits to honor repayment commitments. Guarantees must be available to allow the government to recover all financing in case of non-payment by the beneficiary, who is required to present sufficient collateral corresponding to the principal of the contracted loan.
Reussirbusiness.com
Published September 18, 2012.
Online September 20, 2012.
