Microfinance – ‘it has symbolic value’

Essma Ben Hamida, co-founder of Tunisian microcredit institution Enda, was present when Ivanka Trump helped launch a loan program for women at the recent G20 summit in Hamburg. DW spoke to her in Tunis.

DW: You were recently in Hamburg to attend the G20 summit where you participated in a panel (main picture fourth person from left between Ivanka Trump and World Bank head Jim Yong Kim) over the so-called Ivanka Fund, which is expected to be endowed with $325 million to promote women entrepreneurs in developing countries. How do you view this initiative?  

Essma Ben Hamida: First of all, I view positively all initiatives aimed at promoting women’s empowerment and welfare in developing countries. For centuries, women in these places were totally excluded from economic life, even though they have always been natural entrepreneurs in that they always take care of the household, children and elders in the family.

They contribute significantly to the prosperity of the household and also possess good administrative skills. When given an opportunity to work outside the home, they excel and shine.

Unfortunately, I come from a country where women were long excluded from public life and restricted to their homes. Against this backdrop, any initiative that attempts to empower women is a good development. It’s also good that the World Bank is setting a good example by launching this project, so that governments in developing countries could follow in its foot steps.

Essma Ben Hmida, tunesische Mikrofinanzinstitution Enda (DW/S. Mersch)Essma Ben Hamida: ‘I view positively all initiatives aimed at promoting women’s empowerment and welfare in developing countries’

As a co-founder of Enda, the oldest microcredit institution in Tunisia, I was invited to the G20 summit and it has a symbolic value. Donors want to send a signal that a share of the funds will go to women who lack access to formal financial services. Moreover, it’s not just about granting credit, but also about promoting entrepreneurship among women and equipping them with the skills they need to succeed in the market.

How can an organization like Enda benefit from this new fund?

We already receive funds from institutions like the World Bank as well as the International Finance Corporation (IFC). But we definitely need more resources to support an increasing number of small-scale entrepreneurs and the demand for credit has been high and on the rise.

Since we began our work in 1995, we have dispersed over 2.5 billion dinars (around 879 million euros) in credit to about 650,000 Tunisians. Two-thirds of our clients are women.

Unfortunately, our effort has not been supported comprehensively by the government. Microfinance allows women to initially test their entrepreneurial skills in small steps, at 200, 500 or 1,000 dinars.

We would also like to promote digitalization. At present, our customers often have to wait about half a day at the counter to get a credit or to repay. So we have launched a pilot project to transfer the money using an electronic money card, but the legal framework is currently very restrictive.

What kinds of challenges are usually faced by female entrepreneurs in Tunisia?

In 1995, when we asked Tunisian women about what they saw as the major problems facing female entrepreneurs in the country, they stated the following three issues: A lack of access to startup capital and to training as well as a lack of support with regard to marketing.

Today we have found a solution to the first problem and many people are receiving startup capital. But we still lack the means to provide training. Continuous education is, in my view, the decisive factor.

We also organize trade fairs and the like to facilitate market access and networking. Men do business in cafes, hotels and clubs, but small-scale businesswomen cannot do the same as it’s socially not well tolerated. Hence, our 80 offices across the country are a meeting place for women entrepreneurs.

In other words, the entrepreneurs are most likely to benefit more when there is an accompanying program put in place than from mere funding. Is that right?

One of our requests for the World Bank would be to obtain capital support, in order to be able to give more and higher loans. That’s because many customers have been with us for a long time and need higher sums to grow their companies.

At the same time, we need additional resources for the training of our customers, and I have to stress that is the most expensive part. I underlined in Hamburg that microfinance has allowed the poorest among the poor to finance themselves. Microcredit institutions, through the interest paid on their funds, can finance themselves, but we need support when it comes to training as we cannot afford doing that all by ourselves.

It would be a good investment, as it could help create more jobs in the medium term as well as allow companies to become more professional and financially viable. We believe that our customers have so far not only found work for themselves, but have created around 100,000 additional jobs.

Since the revolution in Tunisia a few years ago, we have also been supporting many startups founded by young people. We cannot, however, simply grant them credit and leave, as they also need support, for example on issues such as how to come up with a viable business plan.

At present, we are working with the second generation: previously almost all borrowers came from the informal sector. Today, it is often their children, who have mostly had better education and are therefore starting under better conditions. But the youth unemployment rate in Tunisia remains high and that’s why many of are turning themselves into entrepreneurs.

So we have set up an incubator for them, where, for example, we offer startup consulting services to ensure that the firms are successful in the long run.

Essma Ben Hamida is director of Enda Inter-Arabe (Enda), which she co-founded in 1990 with Michael Cracknell and President of the microfinance network of Arab countries Sanabel. In 1995, Enda launched the first microcredit institution in Tunisia, which today reaches thousands of active clients, mainly women, in the poor areas of Tunisia.

The interview was conducted by Sarah Mersch in Tunis.


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