Measures to Overcome Revolution-Induced Problems

Very few revolutions go smoothly—Tunisia’s is no exception. The disruptions caused by job-destroying strikes and general mayhem have made reaping the expected gains of democracy more difficult to achieve.

The poor are always the first losers in times of economic downturn and the micro-enterprise sector in Tunisia has been hard hit. Torching of premises, pillaging of stocks, and other criminal acts have affected the poor, not only the rich. Providence even intervened when hail destroyed crops of several of Enda’s rural clients in one area!

These home-spun problems have been compounded by those in neighboring Libya where many Enda clients bought and sold, some basing their whole business on trade.

Another dramatic example of the Libya connection concerned small dairy farmers. When the thriving dairy product trade with Libya dried up, Tunisian dairies stopped purchasing milk from their smallest suppliers, many of them Enda clients; with no outlets, they were obliged literally to throw their milk away.

Many of our 165,000 active clients in January were affected directly by the revolution while many others are having trouble securing supplies or maintaining their client base. Indeed, some of our branches have also been affected and are forced to temporarily close when trouble breaks out in their zone.

In financial terms, Enda’s PAR30 stood at 0.33% at end-December 2010. Today it is around 6%. Since 75% of our new loans were financed by repayments, this has had a considerable impact.

But our financial partners have stood beside us. Four Tunisian banks and three international financial institutions have provided new loans, which will allow us to continue growing despite the downturn in repayments.

Meetings were held with clients in all branches to better apprehend their problems and work out ways to face them.

Enda thus adopted several measures to stand by the clients. These included providing subsidies to those most badly affected, introducing a “disaster” loan at 8% for clients to allow restocking or to refurbish homes and premises, refinancing loans for businesses that faced severe supply or marketing problems, rescheduling loans where repayment had become problematic due to problems in the business or the family (loss of employment), and a repayment moratorium where there was a temporary cessation of activity.

Further to these technical adjustments, Enda has also opened eight new branches since the revolution, mainly in the south where thousands of refugees (Tunisian and Libyan) have crowded in, and introduced a special and provisional product for Tunisians returning from Libya and willing to settle back by creating a micro-enterprise. The latter has financial support from the British and French Embassies with collaboration from the Ministry of Social Affairs.

Moreover, as a modest contribution to facing Tunisia’s serious employment problem, Enda is preparing, with financial support from the Swiss government and technical support from other partners, a new product aimed at encouraging young people to become self-employed through micro-enterprise.