A number of financial mechanisms and institutions have been established to help the entrepreneurial process, intervening at various levels:

Capital: grants or shareholdings

National fund to promote handicrafts and small trades (FONAPRAM: Fonds National de Promotion de l’Artisanat et des Petits Métiers)
Fund to promote and decentralize industry (FOPRODI: Fonds de Promotion et de Décentralisation Industrielle)  
Financing to encourage innovation in information technologies (RITTI: Régime d’Incitation aux Technologies de l’Information)
Capital risk investment companies (SICAR: Sociétés d’Investissement à Capital Risque)

Short and medium-term investment loans

Tunisian solidarity bank (BTS: Banque Tunisienne de Solidarité)
Bank to finance small businesses (BFPME: Banque de Financement des PME)
Banking system
Leasing

Guarantees: to guarantee loans and shareholdings

Tunisian Guarantee Company (SOTUGAR: Société Tunisienne de Garantie)
National guarantee fund (FNG: Fonds National de Garantie)

National fund to promote handicrafts and small crafts (FONAPRAM)

Legal framework

Law n°81-76 of 9 August 1981, setting up a national fund to promote handicrafts and small crafts
Decree n°2005-2024 of 18 July 2005

Beneficiaries 

Private individuals holding Tunisian nationality, who can provide a minimum of 40% of capital stock equity
Maximum investment: 50,000 dinars, which can go up to 80,000 for projects proposed by graduates of higher education

Modalities

A subsidy equal to 6% of the cost of the project
Une prime : 6% du coût du projet.
Provisions :

1/ I≤ 10,000 dinars:	90% of capital stock equity
	10% personal financing in cash
2/ 10,000 dinars< I≤ 50,000 dinars :	80% of additional capital stock equity
	20% personal financing in cash
3/I>50,000 dinars :	60% of additional capital stock equity
	40% personal financing in cash

The grant is repayable (at no interest) over a period of 11 years, with a grace period that is no longer than the duration of bank loan repayments.

File to be assembled

The file must include the following documents:

bank loan application to the bank of choice
technico-economic study
copy of the professional card
pro forma invoices
information sheet
estimate for work to be done
commitment to manage the project
guarantees
a certificate affirming that the declaration to invest has been submitted

National fund to promote and decentralize industry  (FOPRODI)

Legal framework

Art 45 of law n°73 –82 of 31 December 1973, which establishes the fund to promote and decentralize industry

New promoters

Beneficiaries

Private individuals holding Tunisian nationality, whether working together as a company or not, and who:
have the required experience or qualifications
have insufficient holdings in either moveable goods or real estate
are undertaking their first investment initiative and who take on personal, full time
responsibility for its management
provide at least 30% of capital stock equity in the investment package

Maximum investment: 5,000 dinars
 

Modalities
Reimbursable provisions

Only if the investment is ≤ 500,000 dinars

- Promoter’s contribution: minimum of 10% of capital stock equity
- FOPRODI contribution: maximum of 60%
- others: 30%

or

Holdings in capital:

* 1st portion: up to 1 million dinars
- Promoter’s contribution: minimum 10% of capital stock equity
- FOPRODI contribution: maximum of 60%
- capital risk investment company: minimum of 10%
- others: 20%

* 2nd portion: from 1 to 5 million dinars
- Promoter’s contribution: minimum 20% of additional capital stock equity
- FOPRODI contribution: maximum of 30%
- capital risk investment company: minimum of 20%
- others: 30%

Small businesses
Eligibility: manufacturing industries and services to industry

Modalities

Reimbursable provisions
only if the investment is ≤ 500,000 dinars
 - shareholders’ contribution: minimum 10% of capital stock
- FOPRODI contribution: maximum of 30%

or

Interest in capital
1st portion: up to 1 million dinars
- FOPRODI holdings: maximum 30% of capital stock
- SICAR: minimum equal to FOPRODI holdings, no more than 50% of capital stock
2nd portion: from 1 to 5 million dinars
- FOPRODI holdings: 10% maximum of additional capital stock
- capital risk investment company: minimum equal to FOPRODI holdings

Conditions for onlending of provisions: 12 years, with an interest rate of some 3%.
Conditions for onlending of interest in capital: 12 years, with an interest rate equal to the nominal rate plus the Central Bank’s call for bids rate.

Procedures

Cas d'une participation au capital

Cas d'une dotation remboursable

Financing to encourage innovation in information technologies (RITTI)

Legal framework

Article 12 of law n°98-111 of 28 December 1998, constituting legislation for the 1999 budget

Beneficiaries :

Graduates of higher education who have an idea or innovative project in the field of information technologies.
Creation or extension with a cost of no more than 500,000 dinars
Equity: minimum 50% of the cost of the project
Promoter’s contribution: minimum 2% of equity in cash

Modalities

Holdings or provisions: 49% of equity (up to a ceiling of 120,000 dinars)
Onlending or repayment: 7 years
Rate: nominal rate plus the Central Bank of Tunisia’s call for bids rate

Profits from State holdings go to the promoter, to be used solely for buying out these shares.

Procedures

 
Capital risk investment companies (SICAR) :

Legal framework:

Law n°95-87 of 30 October 1995, modifying and adding to law n°88-92 of 2 August 1988 concerning investment companies

Modalities

SICARs intervene by subscribing to or acquiring corporate stock or shares and, in general, all other categories of capital stock equity.
SICAR holdings are governed by agreements with promoters that set the time frame and modalities for onlending.
Holdings must not constitute a majority share. Holdings in equity for themselves or on behalf of others, meant to fund investment and thus encourage new promoters or ventures in priority regional development zones.
Capital risk funds can also participate in increased equity in companies encountering economic difficulties that are eligible for assistance in recovery efforts as well as in innovative companies.

22 capital risk investment funds have been cleared to manage FOPRODI.

File to be assembled

The file must include the following documents:

application to the capital risk investment fund of choice
feasibility and profitability study
certification attesting to the required qualifications and experience
company assets
information sheet

Tunisian Solidarity Bank  (BTS)

Legal framework

Law n°97-87 of 29 December 1997 authorizing the State to subscribe to BTS capital

Beneficiaries

Private individuals, graduates of higher education or professional training, who are looking for a new job in the framework of a restructured national economy

Maximum loan: 15,000 dinars that can go up to 50,000 dinars for graduates of higher education

Modalities

The Tunisian Solidarity Bank grants short and medium term loans with a preferential interest rate of no more than 5% a year.

Period of reimbursement: from six months to seven years
Grace period: from three months to one year

File to be assembled
The file must contain the following documents:

- form, available at the BTS
two copies of national identity card
stamped envelope
legalized copy of the applicant’s diploma
list of material, supported by proforma invoices

Tunisian Solidarity Bank(BTS)
Address: 56, Avenue Mohamed V - 1002 Tunis
Telephone: (216) - 71 844 040
Fax : (216) -71 799 285
email : bts@Email.ati.tn

 Bank for financing small businesses  (BFPME)

Legal framework:

Article 23 of law n°2004-90 of 31 December 2004, constituting legislation for the 2005 budget

Beneficiaries

new promoters
companies planning to expand
small businesses that have been awarded a government contract
Maximum investment ranges from 80,000 to 4 million dinars

BFPME does not deal with tourism, real estate promotion or land speculation.

Modalities

intervention by the Bank will not exceed 1 million dinars.
granting of medium and long term loans, co-financed with other financial institutions:
medium term (five to seven years) money market rate + 2.75%, up to 3.25%
long term (seven to ten years) money market rate + 3.5%, up to 4%
limited holdings in newly constituted companies, or in companies already in existence, in partnership with capital risk investment funds
advances made to small businesses that have been awarded a government contract

File to be assembled

The investor needs to provide two copies of the file, one for the BFPME and the other for the commercial bank:

application for financing
feasibility study for the undertaking
documentation attesting to the required qualifications and experience
copy of the national identity card

Bank for financing small businesses (BFPME)
Address: Avenue Mohamed V, 1073 Tunis Montplaisir (Tunisia)
Telephone: +216 71 785-985
Fax: +216 71 795-424
email : bfpme@bfpme.com.tn

 Banking system

Banks

grant all kinds of loans
acquire holdings

Financial institutions

leasing companies
factoring companies

o Use of appropriate financial management techniques in handling client accounts, by taking over their claims
o Ensure collection of these claims on its own behalf

Offshore banks provide loans to non residents.

Development banks provide financing for medium and large scale projects.

Central Bank of Tunisia (BCT)
http://www.bct.gov.tn/

 Leasing

Legal framework

Law n°94-89 of 26 July 1994 governing leasing activity

Modalities

Leasing is an alternative to bank loans that is governed by a written contract stipulating rental of items for a set period of time, allowing the lessee to:

rent equipment, material or real estate that have been bought or produced for rental by the owner, who remains the owner
the possibility for the lessee of acquiring all or part of the equipment, material or real estate at the end of the rental period, at a mutually agreed price.

There are 11 leasing companies in Tunisia.

Documents to be assembled
The file must include the following documents:

duly completed form
legal file
financial file

- application for funds
- invoices for the material to be purchased
- profitability study justifying the proposed investment
- proposed guarantees

The Tunisian Guarantee Company (SOTUGAR)

Legal framework
Article 24 of law n°2002-101 of 17 December 2002, constituting legislation for the 2003 budget

Beneficiaries
Manufacturing industries, computer services, projects assisted by RITTI (financing to encourage innovation in information technologies) that involve investment between 50,000 and 4 million dinars, as well as capital risk joint investment funds and start-up funds.

Modalities

Shared risk

- 75% for regional development zones
- 60% for other zones

Coverage

- 75% for regional development zones
- 50% for other zones

In cases of dispute, the system kicks in as soon as the bank initiates legal proceedings:

- to provide its share of the guarantee to refinance half of the unpaid amounts of loan principal;
- to assume interest on the other half of the unpaid amount of loan principal
- to guarantee a return on capital risk investment companies holdings

File to be assembled

form, available at the bank
copy of the contract and table showing loan repayments
the last two balance sheets
provisional operational tables, in case of extension
 

Tunisian Guarantee Company  (SOTUGAR)
124 Avenue de la Liberté, 1002 Tunis (Tunisia)
Telephone: +216 71 282-460
Fax: +216 71 280-955
email:  sotugar@sotugar.com.tn
            info@sotugar.com.tn
Website : http://www.sotugar.com/

National Guarantee Fund  (FNG)

Legal framework
Law n°2000-72 of 17 July 2000 concerning the National Guarantee Fund

Mandate of the FNG
Guarantee final resolution of certain categories of loans made by banks from their ordinary resources, loans to small and medium-scale economic units, and certain categories of stock held by capital risk investment companies in small businesses, as well as micro credit handled by civil society associations

Eligible loans and holdings

Short, medium and long term loans to small and medium scale farmers and fishermen
Loans granted in the framework of FONAPRAM, FOPRODI and RITTI
Holdings granted in the framework of FOPRODI and RITTI
Other kinds of loans (pre-export financing, seasonal loans …)

Modalities

Payment of interest on unpaid amounts on loan principal declared to the Fund, in a proportion ranging from 50% to 90% of unrecoverable loans and holdings
Assumption of fees for dispute proceedings and collection of loans, in proportion to stock yields and total interest from rescheduling of loans

File to be assembled

Form available at the bank