The development of credit guarantee mechanisms as part of a public-private partnership (PPP) approach could be an avenue to be explored by decision-makers in order to facilitate SMEs’ access to finance and guarantee these companies sustainable and inclusive growth conditions, said the Governor of the Banque de Tunisie (BCT), Marouane Abassi. Speaking in Tunis at the 7th International Conference of Guarantee Companies and Programmes in the Middle East and North Africa (MENA) region, Abassi added that “market solutions alone are not enough and government intervention has reached its limits”. «A higher level of risk, the unavailability of quality information and the lack of collateral (the security provided in exchange for a loan) are all factors that testify to the existence of a financing gap for very small enterprises (VSEs) and small and medium-sized enterprises (SMEs), said the BCT governor. The meeting is held by SOTUGAR on October 24 and 25 on the theme of «Guarantee institutions, decades of activity, realities and challenges.» Abassi recalled that the COVID crisis had highlighted the «importance of credit guarantee mechanisms as shock absorbers to ensure business continuity and the preservation of the economic fabric, although their contribution to promoting growth and financial inclusion is still limited”. Marouane Abassi stressed the need to rethink the institutional and economic model of credit guarantee financing mechanisms, as well as their regulatory and governance framework, so that they can fully play their role as catalysts of risk in the financing of VSEs and SMEs. “A credit guarantee institution must be established as a true financial institution, with an effective business model and sufficient resources. It should be subject to a governance and regulatory framework. Existing credit guarantee mechanisms must be subject to effective and appropriate regulation and supervision to ensure their viability,” the BCT Governor added. For his part, Tahar Ben Hatira, Chairman and CEO of the Tunisian Guarantee Company (SOTUGAR), called for the improvement and stabilisation of the business climate. “In the absence of these conditions, investors cannot invest, lenders cannot finance and even guarantee institutions cannot guarantee something that does not exist,» he pointed out. He recalled that since its inception, SOTUGAR has been working to facilitate access to finance for VSEs and SMEs in order to promote economic development and overall financial inclusion. Minister of Finance, Sihem Nemsia, said guarantee companies play a crucial role in supporting and facilitating the access of VSEs and SMEs to the financing they need to carry out projects and investments in various sectors. “The Ministry of Finance, in cooperation with the World Bank, is working on an action plan to better develop SOTUGAR, given the importance of the guarantee system in promoting growth and ensuring the financing of economic institutions,” she said. She pointed out that an agreement was signed in January 2023 between the Ministry of Finance and the BCT to improve the methods of management and supervision of SOTUGAR. This agreement reflects the desire of the public authorities to adopt best practices in risk management and to increase the company’s contribution, she said. The 7th International Conference of Guarantee Institutions and Programmes in the Middle East and North Africa (MENA) region was attended by senior executives, managers and representatives of guarantee institutions, the majority of whom came from Arab countries: Morocco, Algeria, Egypt, Jordan, Libya, Qatar, Yemen, Lebanon, Saudi Arabia, etc.
Source: Agence Tunis Afrique Presse