IFC SOLUTIONS 94898 Microfinance Stories of Impact This series provides examples of our impact, expertise and lessons learned working with clients and partners. Helping ENDA Inter-Arabe Stay Ahead of the Curve Founded in 1990, ENDA Inter-Arabe (ENDA) has RESULTS & IMPACT risen to become the largest microfinance institution (MFI) in Tunisia, and one of the most successful MFIs IFC has : in the Middle East and North Africa. Yet in 2011,  Extended a local currency loan worth $6.5 million to ENDA in August 2012 ENDA was hit hard by the economic instability in the  Helped the institution adopt advanced region triggered by the Arab Spring: many risk-management and portfolio microfinance clients lost their livelihoods and were monitoring practices  Assisted ENDA in conducting market unable to make payments on time. research to understand client needs, better market its products and position At a time of limited fund availability in Tunisia, IFC itself to face new competition played an important counter-cyclical role, extending a local currency loan worth $6.5 million to ENDA. In As of June 2013, ENDA has: parallel, IFC helped the institution develop a sound  Reached over 226,000 active clients (65 percent of whom are women) recovery strategy, implement advanced risk  Built a microfinance loan portfolio of management and portfolio monitoring practices, and nearly $90 million adjust its products to client needs.  Maintained stable portfolio at risk (loans overdue by 30 days or more) of below 3 percent, compared to 6 percent in 2011 “With IFC's support, we were able to develop new tools to look at our portfolio, better assess the risks we are facing, and overall have  Demonstrated that recovery and growth are possible during continuing a more structured and systematic approach to lending which will economic instability help us to face a more competitive market in the years ahead.” — Houda Kebaili, ENDA Risk-Management expert In partnership with Denmark, Japan IFC SOLUTIONS MICROFINANCE The Opportunity Our Approach Founded in 1990, ENDA Inter- Arabe (ENDA) has become IFC played an important counter-cyclical role at a time that one of the most successful microfinance institutions (MFIs) in few investors had funds available for Tunisia, extending a Tunisia and the broader region - both in terms of number of local currency loan equivalent of $6.5 million to ENDA in clients and financial results. 2012 (previously, IFC invested $ 2.5 million in local currency into ENDA in 2007). IFC also worked with ENDA to further ENDA has focused on lending to low-income households and develop its loan recovery strategy, while focusing on risk female micro-entrepreneurs in Tunisia, offering a range of management and portfolio quality. microcredit products tailored to their needs . In addition, ENDA has been providing financial literacy education for As a part of crisis response, ENDA staff met with clients low-income communities. across the country to better understand their problems and needs. These meetings resulted in a new “disaster” loan When Tunisia became one of the epicenters of the Arab product for distressed clients, and in some cases - rescheduling Spring - a wave of revolutions in the Middle East and North and repayment grace periods. Africa - people at the base of the pyramid were the first to feel the economic distress. Due to high inflation and a steep With IFC support, ENDA’s field officers focused on recovery, decline in tourism and other key sectors, many microfinance while categorizing clients by the likelihood to repay and clients were struggling to make their payments on time. highlighting at-risk segments of its portfolio. These efforts and Consequently, Tunisia’s microfinance market, which counts other pro-active monitoring and risk-management tools helped up to 400,000 borrowers, was deeply affected by the economic the institution mitigate damage from the economic downturn. instability. While ENDA slowed its expansion initially to emphasize Like many MFIs in affected countries, ENDA saw its portfolio portfolio quality over volume, it kept the interests of its clients at risk (loans overdue by 30 days or more) rise from 0.3 in mind. To this end, ENDA continued to serve clients percent in December 2010 to over 6 percent by October 2011. affected by the crisis and lend to agri-entrepreneurs in Since ENDA financed the majority of new loans through Tunisia’s rural areas, while opening new branches in the south repayments, its operations were impacted. Furthermore, of the country, and providing financial services to refugees ENDA had to temporarily close some of its branches in the from Libya. areas most affected by political turmoil. As of June 2013, ENDA had over 226,000 active clients, 65 percent of them women, and a loan portfolio of nearly $90 million. Its portfolio at risk (PAR>30 days) had returned to below 3 percent – well within the average in the region and better than counterparts in other crisis-affected markets. In Tunisia, where 1.4 million people - nearly 12 percent of the population - do not have access to formal financial services, microfinance plays a critical role in reaching the poor. Given the high demand and the continuing economic instability in the region, ENDA’s recovery and growth are particularly important not just in Tunisia, but by setting an example for other microfinance institutions in Middle East and North Africa. IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries. Fethia Gueblaoui, a micro-entrepreneur and a client of ENDA Inter-Arabe (Photo credit above and front page: IFC) REGION: MIDDLE EAST & NORTH AFRICA | COUNTRY: TUNISIA | STRATEGIC PRIORITY: MICRO- SMALL & MEDIUM ENTERPRISES, GENDER | THEME: MICROFINANCE CONTACT Matt Leonard | Cairo MLeonard@ifc.org | + 20 (2) 2461-4216 ifc.org/fm October 2013