In Tunisia, Connexus serves as a subcontractor to Chemonics International on the $77.6M USAID Tunisia Jobs, Opportunities and Business Success (JOBS) Project, which seeks to create 70,000 new jobs by the end of the project. As of the end of December 2023, JOBS had facilitated $458.7M in commercial investment to 41,694 clients (including $262.4M in credit to 23,483 medium sized businesses, $155.6M in equity to 115 larger companies, and $40.7M in micro loans to 18,096 micro and small businesses). In addition, JOBS has created and sustained nearly 60,000 jobs in Tunisia to date.
Connexus works through multiple pathways to strengthen the competitiveness of small and medium enterprises (SMEs) and catalyze job creation through improved access to finance and investment. To promote a diverse ecosystem of finance and investment services, Connexus has implemented activities focused on debt, equity, blended finance, risk management, and capacity building.
In response to the pandemic, the Government of Tunisia requested assistance from JOBS in 2020 to develop models, policies, and systems to operationalize a $255M Emergency Fund and five sub-funds. These funds provided equity, mezzanine finance, and cash-out investments for a broad range of SMEs impacted by COVID. Connexus developed the investment strategy and negotiated the terms for the Emergency Fund, as well as its governance and operational models, and financial and administrative policies. In addition, Connexus supported the development of legal and regulatory documents to create the fund and developed a fundraising strategy.
To support recovery from the pandemic, Connexus designed a blended finance mechanism using grant funds to leverage private loan funds to jump start businesses in the most impacted sectors, especially in underserved regions across Tunisia. To disburse funds quickly, JOBS worked with leading microfinance institutions Baobab Tunisie and Advans Tunisie. JOBS mobilized blended finance worth $40.3M, reaching more than 20,000 hard-hit enterprises. USAID’s $10M of grant funding leveraged private finance totaling $37M, with a leverage ratio of $3.7 in private money for every $1 of US Government funds. By quickly disbursing funds to those businesses most in need, JOBS was able to sustain 41,783 jobs and create 3,938 new jobs.
To promote digital finance, Connexus supported development of software applications for four partner finance institutions. We helped create a virtual branch network for the Bank of Tunisia and the Emirates (BTE), which allows clients to access a full range of banking services without leaving their house, facilitating $92.3M in financing. In addition, Connexus developed a digital retail banking application to facilitate customer acquisition, offer financial services, and manage customer relations for the Tunisie Leasing and Factoring company (TLF), leveraging $27.6M in leasing deals. We designed and automated a credit scoring system for Government of Tunisia’s Small and Medium Enterprise Finance Bank (BFPME) to improve access to loans for “thin file” clients without significant credit history and to strengthen risk management for the institution, enabling $15.5M in lending. Using a value chain finance approach, Connexus developed non-interest financial products, improved credit processes, and strengthened operations for Zitouna Tamkeen, an Islamic microfinance institution, supporting $13.4M of Shariah-compliant finance.
To build the financial services ecosystem, Connexus is running a digital sandbox challenge to develop retail banking applications using real data from a financial partner (Attijari Bank). Information and communication firms focused on financial technology (fintechs) were given access to anonymized banking data through an application program interface (API) sandbox to create digital retail banking solutions that improve access to finance. With the data from the sandbox, programmers can mimic characteristics of a real digital banking environment, safely experimenting with innovative financial products or services to pilot test new technologies for future rollout.
Connexus also supported development of an online digital investment platform – JoussourInvest – to improve the efficiency and accelerate the flow of finance to SMEs. This digital marketplace matches SMEs with equity and quasi-equity investments from venture capitalists allowing businesses to grow and investors to exit, thus improving liquidity in the private equity system. The JoussourInvest platform is now one of the largest investment facilitation mechanisms in Tunisia, with an active user base of 58 investors and 2,510 SMEs. As an alternative channel for investment transactions, JoussourInvest has facilitated $95.3M in equity transactions to date.