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Tunis, 28 March 2007 – The African Development Bank has provided Tunisian Small-and Medium-Size Enterprises with additional financial resources through a line of credit of 100 million Euros extended to the Société Tunisienne de Banque (STB). The operation was approved today in Tunis by the Bank’s Board of Directors along with a technical assistance grant.
The line of credit will enable the STB to have long-term resources at a competitive price in order to meet the SME/SMI project promoters’ demand for financing in the productive sectors. It will thereby foster the development of the private sector of Tunisia to the extent that the financial units to be financed will be essentially private. It will enable the STB to maintain its market share while contributing to economic growth during the 2007-2011 period.
The sub-projects to be financed will contribute to reducing unemployment through the creation of nearly 5,000 direct jobs which will generate additional revenues for households in the regions where the sub-projects are located as well as contribute to poverty reduction. Indirect jobs will be created in construction and other service sectors that will help implement the works financed. The units financed will create value added and generate foreign exchange incomes and revenues for the government.
The building of STB’s institutional capacities will enhance its contribution to the economic development of Tunisia through training of the workforce in modern banking and the establishment of the principles of good governance.
The line of credit falls within the development strategy defined by the government based on the guidelines of the 11th Development Plan, which calls for a sustained effort in the private sector to increase its share of the overall investment expected to reach 65% by the end of the plan in 2011. To achieve this objective, the contribution of the banking sector to the development of the private sector through the financing of key sectors of the economy of Tunisia, mainly manufacturing industries and services, will be crucial to achieving the annual 6.5% growth set for the 2007-2011 period.
The line of credit is intended to remove one of the obstacles to private sector development namely, the lack of medium and long term resources that hampers investment project promoters’ access to financing. It aims to address this concern by strengthening the stable resources of the STB, which has solid experience in medium and long term financing.
Since the beginning of its operations in Tunisia in 1968, the Bank has financed 92 operations, 78 of which have been completed, for a net commitment of 3,400 million Units of Account*. To date, 35 lines of credit were granted to local financial institutions, including 3 direct interventions in the private sector. The lines of credit have had a decisive impact on the country’s development through the support to industry and tourism. They also enabled the banking sector to adequately meet the high demand for financing that accompanied private investments.