MEDITERRANEAN. "The whole economy is based on confidence” says Henry Roux-Alezais, president of the Institut de la Méditerranée. “Investment dries up when uncertainty reigns.”
Lessons from history can inspire the future. "After the Second World War, social economy developed in Europe and then in South America and Asia. It aims to help small businesses but hasn’t arrived in the southern Mediterranean" says Mr Roux-Alezais. In that part of the world, people opted instead for exports or large-scale construction projects – sectors that create business in Europe but do not make an impact locally and leave little space for small businesses. Big projects therefore have no lasting structural effect on these countries. Mr Roux-Alezais explains: "In the southern Mediterranean countries, social economy was seen as a poor man’s free-market economy. Since then, microfinance, which gives more immediate unsecured access to SMEs with very close ties between borrowers and lenders, has really taken hold."
"There is an urgent need in the south to create jobs” says the president of the Institut de la Méditerranée. “We have a real desire to develop this social and solidarity economy in the southern Mediterranean countries because it is impossible to build an economy without credit. It’s not about charity; in fact it’s precisely the opposite” he adds. The aim is to put together several companies from the same sector with a financier to offer them a short-term loan (between one and two years) at a rate of 8-9%. "We must immediately get the most from these countries’ strong points.” The idea is to imitate CoopEst, which was launched in 2005 when central and eastern European countries joined the European Union.
€20m for CoopMed
CoopEst has a small team of fewer than ten people in Belgium, which makes it very responsive and facilitates lending to microenterprises and SMEs by financial intermediaries (microfinance organisations, credit unions, cooperative banks, etc.).
Based on this model, CoopMed was officially created on 8 June 2011 and will be based in Brussels as a Belgian-law company limited by shares. The Institut de la Méditerranée in Marseilles will take care of front-office duties. "We need to get out there, find intermediaries and create sustainable jobs in a sustainable economy” says Henry Roux-Alezais. “It’s the complete opposite of subsidised jobs. We’re going to create a pipeline of opportunities.”
Supported by FEBEA (European Federation of Ethical and Alternative Banks), which groups together Crédit Coopératif (France), Caisse Solidaire du Nord Pas-de-Calais (France), Crédal (Belgium), Hefboom (Belgium), Banca Etica (Italy) and TISE (Poland), CoopMed has initial funds of €20m. This will be divided as follows: 25% in capital, 25% in mezzanine debt (repayment of which is subordinate to senior debt) and 50% in senior debt. The targeted countries are Morocco, Algeria, Tunisia, Libya, Egypt, Israel, Palestine, Jordan, Lebanon, Syria and Turkey.
The organisation will be officially unveiled on 15 October 2011, but CoopMed has been active since August and is already looking for potential beneficiaries of an initial package of €5m with three operations in at least two countries. The first deals should be signed during the first half of 2012. "We’re going to try and revitalise the plans of young companies to prime the pump and get into the banking system. Talks are already under way,” reveals Henry Roux-Alezais.
Read also : Institut de la Méditerranée lends support to Coopmed