Microcred Tunisia has launched loan product Irada, aimed at financing 450 young startup entrepreneurs over a three-year period.
Microcred Tunisia, which aims to provide financial services and support to groups generally excluded or underserved by the traditional financial system, has launched Irada in partnership with Silatech, a regional social initiative that works with partners throughout the Arab world to provide employment and entrepreneurship opportunities for young people.
Silatech is providing expertise and loan capital along with training to help Microcred loan officers support and coach young startup entrepreneurs during the pre- and post-financing phases, with Irada also supported by the European Union, AFD, the United Nations’ (UN) International Fund for Agricultural Development (IFAD), Making Cents International and Planet Finance.
The partners said Irada is one of a new group of loan products designed for young startup entrepreneurs, and is responding to the regional youth unemployment crisis. Youth unemployment in Tunisia stands at 31 percent, while the Middle East and North Africa (MENA) region in general the world’s lowest levels of financial access.The World Bank estimates there is a financing gap for micro, small, and medium-sized enterprises (MSMEs) of around US$350 billion.
“Tunisia is a country of focus for Silatech, and this partnership with Microcred represents an innovative response to the youth unemployment crisis in the region,” said Silatech chief executive officer (CEO) Mohammed Al Naimi.
“The Irada project will play a key role in turning job seekers into business owners, creating jobs for other youth as they grow their businesses and contribute to the economic development of the country.”
Bodo Lieberam, CEO of Microcred Tunisia, said the first disbursement of the Irada loan took place this week, with Microcred granting a loan of TND4,500 (US$2,300) to a 25-year-old entrepreneur opening a shop for dried fruits and other alimentary goods.
“Those young people are full of energy and ideas, but what is lacking is funding to start a new business,” he said.
“But our support is much broader than just funding. We train the people in management, basic accounting, legal aspects and commercialisation and help them doing their business plan. The conditions of the loan are adapted to the situation of each individual client. After the disbursement of the loan we coach the young entrepreneur in order to increase the chances of success.”