In what may be a first for the Arab world, an eco-friendly laundry is setting up shop in Tunisia. In the mountainous Khroumiri region, artisans are reviving the craft of Berber carpet making, and they’re using an improved loom design and a fair-trade marketing plan to do it. Meanwhile, a technology innovator is helping hospitals throughout Tunisia to digitize patient records.
In the wake of the Arab Spring, a new spirit of entrepreneurship is taking hold in this North African country. Through a project called Souk At-tanmia (Arabic for “marketplace for development”), 71 budding businesspeople are accessing start-up funding and technical help to turn raw ideas into commercial reality.
Investing in small and medium-sized enterprises is new territory for the African Development Bank (AfDB), which is spearheading the project. But fresh ideas were in order after the Arab Spring. “Right after acquiring freedom in 2011, people’s biggest priority was how to create more jobs,” says Emanuele Santi, AfDB’s country economist for Tunisia and founder of Souk At-tanmia. “They were protagonists of their own destiny during the revolution. Now they want to be protagonists in building a new Tunisia.”
Entrepreneurs don’t succeed on the basis of optimism alone, of course, especially in a country like Tunisia—where, Santi says, “creativity has been repressed for decades.” That’s why Souk At-tanmia has created what he describes as “an entire value chain of partners.” Among the 20 partners that AfDB has recruited are Microsoft and other multinationals, the Millennium Development Goals Achievement Fund, and various NGOs.
“Souk At-tanmia has managed to unite a multitude of actors from public, private, and civil society to support entrepreneurs across the country,” says Carrie Beaumont, program manager for Mercy Corps Tunisia, a humanitarian organization that provides coaching and support for early-stage entrepreneurs. Most young entrepreneurs, for example, are inexperienced at making a pitch. “Banks complain that they do not receive good applicants,” Beaumont notes. Without external support, “many projects may not succeed,” she says.
With Souk At-tanmia, anyone with an idea was able to apply for the first round of funding, which occurred in 2012. The call for proposals spread widely through a large SMS campaign; Tunisiana, a local telecom provider, sent 5 million messages to promote the initiative. “It was revolutionary,” Santi says. “Still, we weren’t sure anyone would come forward.”
He needn’t have worried. Entrepreneurs, using an electronic submission process, uploaded some 2,000 proposals. A screening process then narrowed the pool to 300. Evaluators gave priority to projects that would boost employment, especially for young people and women. “Innovation was important, but not the main goal,” Santi says. “Our focus was primarily on projects with high potential to generate jobs.”
The British Council, another Souk At-tanmia partner, coached applicants in the pool of 300 on business planning and helped them prep for the next stage of evaluation. In January, a panel of 28 experts picked 71 finalists. Each finalist received a grant of 15,000 euros (about $20,000) and was paired with an appropriate mentor.
The first entrepreneurs to emerge from Souk At-tanmia are a diverse bunch: About a third of them are women, more than half are young people, and 62 percent hail from regions known to have low levels of economic opportunity.
For many grant recipients, this experience was their first encounter with traditional banking. Yet 60 percent of these ventures were able to raise additional capital after becoming finalists. “Banks were confident about giving the green light, because they saw the support structure,” Santi says. “They weren’t financing just anyone. They could see that these entrepreneurs have the assistance they need to succeed.”
People in other African countries have approached AfDB with requests to start similar programs for their fledgling entrepreneurs. So Santi’s next challenge is to help those countries apply the lessons that are still emerging in Tunisia.