Pre-Feasibility Study for NBFI

2011-12-31 - 2012-01-31

In January/February 2012 LFS carried out a three-week mission to pre-study the feasibility of establishing a Greenfield non-bank financial institution/microfinance institution in Tunisia. The prime objectives of the study were not only to examine the market environment (supply and demand) and the prevailing legal situation, but also to identify and assess potential local co-investors for a greenfield venture. As a result of the mission and due to recent positive development in the political environment of Tunisia LFS designed a business plan for the first five years of operations of a potential Greenfield NBFI.
Analysis of the macroeconomic and political situation, investment climate as well as the general business and operating environment, and conclusions regarding possible implications for an NBFI; Analysis of the current supply of financial services in general, and of financial services to MSMEs and other clients in the lower income strata in particular; Estimation of aggregate demand for financial services for MSME loans and other financial services by the target clientele; Analysis of the legal and regulatory conditions for commercial MSME finance operations; Mapping of business activity, main transport/commercial routes and other market/infrastructure characteristics in urban and peri-urban locations; Meetings with potential local co-investors; Meetings with high-level officials of the Central Bank of Tunisia, donor organisations and other stakeholders in the Tunisian financial sector; Identification and analysis of possible legal and licensing forms for a potential NBFI, under the premise that the NBFI should ideally offer not only credit, but also other financial services (especially savings and money transfers); Development of the five-year business plan for a potential NBFI, with emphasis on the following points: Outline of the proposed ownership, governance and management structure; Design of the organisational and institutional structure, with full details of the applicable legal and regulatory framework; Development of a range of asset and liability-side products to meet the needs of MSMEs, with a clear focus on the description of the loan products and the lending technology (including analysis of loan applications, payment motivation, loan monitoring, marketing strategies); Development of a regional expansion strategy and plan; Elaboration of detailed financial projections over a five-year period; Development of a work plan for the establishment of a NBFI; Identification of staffing and equipment requirements during the start-up phase of a NBFI.