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Integrating Microfinance and Cooperatives for Jobs Creation in Tunisia

Author

Listed:
  • Abdelkafi, Rami

    () (The Islamic Research and Teaching Institute (IRTI))

  • Nabi, Mahmoud Sami

    (The Islamic Research and Teaching Institute (IRTI))

Abstract

Although Tunisia has completed its political transition toward democracy, its economy remains fragile and faces huge challenges. Professional insertion of young people in the labor market is among the top economic priorities of the country. Sound public policies with the objective of creating employment opportunities on a short-term horizon have to support the implementation of structural reforms aiming at boosting the private sector, improving the labor market and restructuring the education system. This paper is a contribution to the discussions on short-term solutions to the youth unemployment, which may accompany structural policies over the long term. We propose a jobs creation program for the youth including several components. The implementation of the proposed program assigns an important role to the government in terms of training, incentives to involve the private sector and in terms of funding. The originality of the proposed program is in linking microfinance to cooperative structure; two efficient tools against social exclusion and which are underutilized in jobs creation in Tunisia. The financial participation of the government is proposed according to a specific funding mechanism of Islamic microfinance: decreasing partnership. This mode of financing allows for a full public financing of the cooperatives' capital with an exit strategy after several years, incentivizing the cooperators to generate sufficient profits to buy the government shares

Suggested Citation

  • Abdelkafi, Rami & Nabi, Mahmoud Sami, 2017. "Integrating Microfinance and Cooperatives for Jobs Creation in Tunisia," Policy Papers 2017-2, The Islamic Research and Teaching Institute (IRTI).
  • Handle: RePEc:ris:irtipp:2017_002
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    References listed on IDEAS

    as
    1. ZOUARI, Zeineb & NABI, Mahmoud Sami, 2013. "Enhancing the Enforceability of Islamic Microfinance Contracts in OIC countries," MPRA Paper 49816, University Library of Munich, Germany.
    2. Raj Nallari & Breda Griffith & Yidan Wang & Soamiely Andriamananjara & Derek H. C. Chen & Rwitwika Bhattacharya, 2012. "A Primer on Policies for Jobs," World Bank Publications, The World Bank, number 2390, June.
    3. Ahmed, Habib, 2002. "Financing Microenterprises: An Analytical Study Of Islamic Microfinance Institutions," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 9, pages 28-64.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    Microfinance; Cooperatives; Employment; Tunisia;

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