Job creation was the phrase on everyone’s lips during Global Entrepreneurship Week (GEW) in Tunisia, which kicked off two weeks ago for the 2nd year in a row. The theme, “Entrepreneurship, a Source of Employment,” made the point succinctly: to make it through this transitional time, Tunisia will have to create jobs to employ its youth population and generate economic stability. Many fledgling entrepreneurs, support organizations, and policymakers jumped on board GEW in hope of a solution; the event involved over 300 partners and featured over 100 events throughout the country.
Two events that I attended particularly showed that Tunisians really mean business, and yet also exposed a couple of major challenges that entrepreneurs face in Tunisia.
The first, held at the Mediterranean School of Business (MSB),
featured Mondher Khanfir from private incubator Wiki Start Up, who instructed
entrepreneurs on how to pitch to investors. Mr. Khanfir is an
alumnus of MSB, the only English speaking university in Tunisia to
offer a certified executive MBA program. It now emphasizes
entrepreneurial thinking through new undergraduate and masters
Khanfir explained to eager MSB MA students how to dress the part, know your audience, do your research and keep it short. He encouraged aspiring entrepreneurs, “don’t sell your project, sell your vision” and pointed out that “pitching is one thing but getting money is another.” In the Q&A session, he dispelled myths about regulatory procedures, intellectual property issues, and sources of financing.
One main challenge of the entrepreneurial process came up a few times: there is a critical lack of information on the current market in Tunisia. This includes data on competitors, industry trends and financial data; essentially, the administration is not feeding the market with the intelligence it needs to be competitive. To illustrate the issues, Khanfir joked that the public electricity company STEG’s, balance sheets are considered “top secret” in this country. If Tunisian entrepreneurs are be truly competitive, he concluded, the government must be transparent in its operations and encourage the private sector to share financial information.
The second event gave entrepreneurs an opportunity to actually workshop these skills by pitching to investors and bankers. Organized by ATUGE, an association of Tunisian alumni from the best national and international universities, and hosted by the IACE, the Arab institute of CEOs based here in Tunis, the event consisted of three pitch sessions by entrepreneurs looking for funding to start or grow their businesses.
One of them I found particularly impressive- Yosra Ben Arab
of Golden Tunisian Olive Oil. She and her family produce a line of
high-quality Tunisian olive oil, and yet are struggling to expand
their product line and access new customers. Her presentation
exposed another major impediment to entrepreneurship in Tunisia:
There is not a lack of funds, but banks are too restrictive
to properly empower business expansion.
Yosra has already taken out loans from two Tunisian banks, the Tunisian Solidarity Bank (STB) and the Bank for Small and Medium Enterprises (BFPME), both of which are technically geared to help people like her. But, she lamented, that the loans were limiting and inflexible. While they helped her build her company’s infrastructure, she is looking for investors that will allow her the ability to increase marketing and hire permanent staff.
As there are almost no venture capitalists and very few private equity funds in Tunisia, the only option many entrepreneurs like Yosra have is to go to banks for a credit or debt loan. These financing options are good for building a factory, but don’t provide the flexible working capital that a start-up needs. Start-ups need equity, not a loan, especially since many entrepreneurs find themselves have to use their house or property as loan collateral. This is a risky practice and prevents many from wanting to take the step to transform their ideas into businesses.
Exposing these challenges at Global Entrepreneurship Week
was productive, as now is the time to strike. In our
post-revolution transition in Tunisia, we can leverage these
conclusions to put pressure on the newly formed government to
remove these critical impediments to entrepreneurship. The more
events we have like these, the more information we have to inform
our policy changes. I hope we can keep this momentum up every week
of the year.
[photo from All Voices]