Posted on May 19, 2015

Microcred Tunisia has announced the launch of “Irada,” a new loan product designed especially for young startup entrepreneurs. Designed in partnership with regional social initiative Silatech, Irada is expected to finance around 450 startup businesses in Tunisia over a three year period.

In addition to providing expertise in designing Irada, Silatech is providing loan capital as well as training to help Microcred loan officers support and coach young startup entrepreneurs during the pre- and post-financing phases. Irada is supported as well by the European Union, AFD, UN's International Fund for Agricultural Development (IFAD), Making Cents International and Planet Finance. Irada is one of a new group of loan products designed for young startup entrepreneurs that Silatech is helping microfinance institutions in the region to bring to the market in 2015. Responding to the regional youth unemployment crisis, these products have been designed to enable youth to create jobs not only for themselves, but also for other youth, as their businesses succeed and grow. 

Youth unemployment in the Arab World stands at 30 percent—the highest of any region in the world. In Tunisia, the rate stands at 31 percent. According to the World Bank, youth in the Middle East and North Africa (MENA) region have the world’s lowest levels of financial access, meaning that young would-be entrepreneurs are frequently prevented from starting businesses because they cannot get access to finance. It is estimated that there is a financing gap for micro-, small-, and medium-sized enterprises (MSMEs) in the region of $320 – 380 billion.

Silatech CEO Mohammed Al Naimi commented on this new partnership: “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. He added, “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.”

Innovative financial institutions such as Microcred also stand to gain from targeting the startup market, as the larger financing amounts required by this cohort can generate higher profits. Younger clients can offer substantial lifetime value, and institutions can gain significant positive visibility by implementing meaningful solutions in the fight against youth unemployment. 

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According to Bodo Lieberam, CEO of Microcred Tunisia, the first disbursement of the Irada loan has taken place this week. Microcred Tunisia granted a loan of 4,500 TDN to a 25 year old entrepreneur that will open a shop for dried fruits and other alimentary goods in his quarter of Ezzahrouni, close to the first branch of Microcred Tunisia. “Those young people are full of energy and ideas, but what is lacking is funding to start a new business. But our support is much broader than just funding. We train the people in management, basic accounting, legal aspects and commercialization 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.”

Microcred Tunisia is a subsidiary of the Microcred Group, whose mission is to provide accessible and quality financial services as well as support tailored to people excluded or underserved by the traditional financial system, especially MSMEs. Microcred Group has operations in France, Madagascar, Senegal, China, Nigeria, Ivory Coast and Mali, with Microcred Tunisia launching operations in November 2014.

Silatech is a regional social initiative that works with partners throughout the Arab world to provide employment and entrepreneurship opportunities for young people. Silatech is currently working with 30 microfinance institutions in 11 countries throughout the region, and has to date enabled more than 90,000 youth-run businesses to start and grow, supporting more than 140,000 youth jobs. Silatech is the Arab region’s largest provider of youth financial services.

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