Project to support financial inclusion in Tunisia

In line with the MicroMed project, ADA continues to support the Tunisian sector to promote financial inclusion in the country. In October 2021, ADA, which received a mandate from the Ministry of Foreign and European Affairs of Luxembourg, and the Ministry of Finance of Tunisia signed a partnership agreement for a new technical assistance project endowed with a budget of 1.4 million euros. The project will run for two and a half years and focus on the development of financial education, the protection of microfinance clients and improving the conditions under which microfinance institutions (MFIs) operate.

After several months of waiting due to institutional changes, a certain degree of governmental instability and the COVID-19 health context in the country, the new project to support the financial inclusion sector in Tunisia has finally seen the light of day. It follows the agreement signed by the Tunisian and Luxembourgish authorities in October 2021. The project aims to help to boost financial inclusion, seen as a driver of economic growth through job growth and as a development factor through the empowerment of populations. 

This new project builds on the earlier MicroMed programme, which led to the establishment of a financial inclusion watchdog, capacity building for MFIs by means of the creation of the first microfinance training centre, and improved market infrastructure.

It has three main planks inspired directly by the Tunisian 2018–2022 National Financial Inclusion Strategy: financial education, the protection of MFI clients and improving the technical and financial resources of MFIs.

Putting together a national financial education programme

The project will assist the financial inclusion watchdog in designing a national financial education programme and support the roll-out of financial education activities for the public at large, with a focus on young people and microentrepreneurs. By doing so, the programme is perfectly aligned with the 2018–2022 National Financial Inclusion Strategy, which made financial education one of its five main planks (no. 5), with a view to having "individuals and homes [that] are financially stable and able to make choices and decisions about their financial needs with confidence".

Boosting the protection of microfinance clients

The rapid growth of the microfinance sector in Tunisia, a rather young sector that only started booming in the last decade, brings with it the challenge of "responsible finance", which provides tailored financial services through a transparent and fair process and helps to create a climate of trust in the financial system among consumers. On the one hand, the new project will assist the Microfinance Control Authority in boosting the protection of clients who are urged to use digital services with MFIs and, on the other hand, it will introduce social performance standards to the microfinance sector, which will be approved and shared by all stakeholders.

Improving MFI operating conditions

Despite the headway made in expanding financial inclusion in Tunisia —where 61% of the adult population are clients of formal financial institutions, according to the 2018 National Survey on Financial Inclusion—, the current range of products offered by banks, the Post Office and MFIs does not meet the expectations of the majority of the population when it comes to financial products. This holds especially true for young graduates, women in rural areas and microentrepreneurs. The project will help to take action for the benefit of MFIs, allowing them to acquire knowledge, have adequate methods at their disposal and tap the necessary financial resources to offer financial services adapted to the needs of the populations served.

Finally, the first project coordination committee was set up in December 2021, paving the way for activities to start in 2022.