DR. NABIL GHALLEB– CHAIRMAN & FOUNDING CEO ZITOUNA TAMKEEN
You are the founding CEO of Zitouna Tamkeen, the first and sole Islamic microfinance institution in Tunisia. Can you give a brief overview of Zitouna Tamkeen — the mission and
goals of the organizations?
The idea to establish Zitouna Tamkeen was the product of the successful experiences of the Islamic Development Bank (IsDB) in the Economic Empowerment (EE) field. These experiences influenced me and made me determined to draw upon the already developed programmes to model the idea in an institutional framework with accumulated expertise to become a reference point that can be developed and replicated in other IsDB member countries. It was also intended to be a strong tool in the multilateral’s repertoire to get people employed, fight poverty and achieve sustainable development.
Zitouna Tamkeen was founded, therefore, with the goal of promoting the financial and economic inclusion of Tunisia’s youth and disadvantaged populations. Through an innovative approach we are committed to offer financial and non-financial services to promote the development of projects offering major socio-economic impact, especially in the marginalized regions of Tunisia. Our EE approach is focused on value-chain financing. The objective is to scan for high-potential value chains in terms of job creation and to calibrate the intervention points to reach the greatest number of beneficiaries via the financing of EE projects. Since the beginning, Zitouna Tamkeen has set ambitious targets for EE projects, which include sustainable development, progressive coverage of regions through fixed and mobile branches, interventions in promising sectors, and entrepreneurship capacity-building programmes.
Zitouna Tamkeen’s mission is to be a partner in the economic integration of deprived populations through Islamic microfinance, promoting private initiative sand supporting self-operating projects. The ambitious vision of Zitouna Tamkeen is to become a major player in the Islamic microfinance sector at both national and international levels.
Besides the IsDB, which is the main sponsor of the idea; the founders of Zitouna Tamkeen are Zitouna Bank (the largest Islamic bank in Tunisia), Zitouna Takaful, Poulina Group Holding and Delice Group Holding (both ranked among the top 5 largest business groups in Tunisia), the Tunisian Sovereign Wealth Fund, and Moroccan Jaida Fund (owned by the Moroccan Sovereign Fund, the French Sovereign Fund, the French Development Agency AFD, the German Development Agency KFW and the Moroccan Postal Bank).
Zitouna Tamkeen has taken giant strides and quickly positioned itself in the microfinance sector in Tunisia, gaining national and international acclaim despite its young age. Just one year after commencing its activities, the institution has ventured to double the objectives it announced at inception in terms of the volume of financing, number of branches and the number of beneficiaries, given the huge demand for its products and services. Today, a little more than two years after operations began, the institution has succeeded in financing more than 12,000 income-generating projects. These have led to the provision or sustainability of more than 35,000 direct and indirect jobs through a network of 19 branches where most of them are in the hinterland and least developed regions, three regional master branches and two mobile ones. The mobile branches provide access to the outlying and difficult regions.
It is noteworthy that the institution attaches considerable attention to women empowerment. This has been translated into 40% of the its financing going to women, a proportion that will increase to more than half by the year 2021. The institutions interventions cover all productive sectors without exception and places marked emphasis on the farming sector, agro-allied industries and services, various commercial activities and small industries. This blends with the comparative advantages of the Tunisian economy and the map of the country’s economic fabric.
The institution has offered a package of products that have been designed in accordance with the needs of the beneficiaries and/or the target regions. Zitouna Tamkeen also entered into partnerships with hundreds of suppliers from various fields and negotiated with them in the context of framework contracts to give preferential prices to customers that could reach up to 20% of what is on offer in the market. This is what gives the institution significant competitive advantage over its competitors.
This effort is a part of an overall institutional strategy aiming to build up a network of 40 branches, five mobile ones and five regional master branches in order to economically empower more than 80,000 beneficiaries to create and/or sustain more than 300,000 jobs. The overall financing portfolio is expected to be around 600 million dinars over the next five years to secure a market share varying between 15% and 20%.
Zitouna Tamkeen is widely known as an Economic Empowerment institution rather than a microfinance institution. What is Economic Empowerment and to what extend is it different from Microfinance?
‘Empowerment’ is a term that has been embraced by a diverse range of institutions, from the World Bank to Oxfam to many more radical NGOs, but few of these share common definitions. According to the World Bank, empowerment is the expansion of assets and capabilities of poor people to participate in, negotiate with, influence, control and hold accountable institutions that affect their lives. Another definition states that economic empowerment (EE) is the process through which those who are currently disadvantaged achieve equal rights, resources and power. Most definitions suggest, therefore, that empowerment is the acquisition of authority or power in decision-making process and the use of resources.
As per EE, it is an innovative idea to maximise developmental impact. EE is the movement from a relief, humanitarian and aid approach to support as well as development approach, seeing the targeted people as key partners in development who have latent capacities that should be discovered while working to change their mentalities so that they can become confident in their capacities and potentials. The EE methodology enables the vulnerable categories and the unemployed youth the opportunity to participate effectively in value-added economic projects and to obtain the resources and infrastructure necessary to move, produce, market, and obtain the necessary financial resources.
EE is support and accompaniment until independence in management becomes possible and appropriate economic decisions can be taken. It also covers access to the minimum necessary social services. In another aspect, EE is reliance on self–employment and private initiatives, just as it is the realisation of this difficult balance between social and economic performance. EE is all of the foregoing or at least some of them.
It is important to note that the financing portfolio of Zitouna Tamkeen is divided into two parts: individual financing portfolio such as the one known in the sector and the portfolio for financing EE projects which, according to the five-year plan, is expected to grow to represent the bulk of the institution’s overall portfolio. In terms of services, Zitouna Tamkeen offers a package of financial and non-financial services, single-handedly or with the assistance of its partners. The Institution mostly proposes the project idea since it is the only active institution in the sector which has a specialised department in project engineering (the only one of its kind compared with conventional competitors), out of belief in the importance of regeneration of project ideas.
It brings together the beneficiaries in sustainable structured projects and offers the necessary financing alongside accompanying services and support, not only through a group of business officers but also seeking assistance from a group of experts and technicians that are engaged depending on the need and nature of the project. The department of project engineering defends the beneficiaries’ interest in almost everything. It finds investment opportunities; develops the opportunity in the form of business plans; builds important smart partnerships for the success of the project; negotiates with the suppliers and opens the market, whether local or international; designs new forms of guarantees, and proceeds to offer the beneficiaries real investment opportunities. These projects normally begin with pilot phase and would later develop gradually.
Does youth economic empowerment help in strengthening democratic transitions? Give an example or talk about the projects you are undertaking in Tunisia.
The Tunisian’s revolution and the so-called Arab Spring are an important reminder of why unemployment, more importantly, youth unemployment should be at the forefront of Arab world’s growth agenda over the next decade and even longer. We have seen how in several countries the weight of the crisis has fallen disproportionately on the young people, leaving a legacy of failed hopes, anger and ultimately mistrust in the values of our society. With a large proportion of young people not having any defined role in society, there is a high risk of social cohesion and of mistrust in public institutions being undermined.
Youth unemployment could be not just a threat to authoritarian regimes but also to democracies. In fact, youth unemployment is associated with political violence and armed conflict in developing countries. GDP growth, inequality and inflation are determinants of political instability and unemployment. There is a positive effect of inequality on political violence. Tensions among youth because of inequalities can lead to the outbreak of conflict. In general, countries with good economic outcomes have a lower risk of armed conflict outbreak. The effect of democratic institutions is weak, democracy does not necessarily imply stability.
To avoid instability and violence, the focus should be on monitoring economic opportunities for young people, and particularly on providing employment or educational opportunities for youth in periods of economic decline.
I’m the President of a young NGO called Tamkeen for Development. Two years ago, our NGO launched a United Nations Democracy Fund-funded project in Tunisia. The project skillfully links EE and political participation for youth-at-risk in poverty-prone areas of the country. In fact, the project aims to integrate youth in the country’s social fabric and democratic transition by equipping them to participate in their regions’ economic and political life. A group of young men and women are empowered through the project’s economic inclusion scheme, with the underlying principle that once youth are given the opportunity to become economically independent, they will gradually gain the confidence to proactively engage in civil and political life.
The project selected 1,200 youths living in one of the least developed zones of Tunisia for training in soft skills, project management, participative democracy, and entrepreneurship. Of these, 200 youths received additional technical training in cattle breeding, after which they were given financial support and market opportunities to launch their own income generating activity. In another innovative approach, the project is managed through a youth-led steering committee, allowing them to exercise leadership and launch public initiatives where they can put into practice the foundations of democracy. So far, the main achievements of our project are:
(i) spontaneous creation of 13 Civil Society Entities managed 100% by our youth population including 8 NGOs and 3 GDAs (Agricultural Development Groups); (ii) Involvement of a group of young people in Municipal elections held in 2018 as independent observers and/or candidates; (iii) 60% of our sample participated in the municipal elections against a participation rate of 30% on national level; (iv) More than 40% of our sample has exercised their voting rights for the first time in their lives. This is an illustration of how EE helps in strenghtening democratic transitions.
Any plan to duplicate your experience at an international level?
Early performance indicators of our approach are very promising, and the model is attracting the interest of local and international partners. This is why we are establishing the International Center for Economic Empowerment (ICEE), which is a consulting services company offering advisory services to build and develop the EE business projects and institutions worldwide. It will contribute to equip NGOs; banks and microfinance institutions with EE business methodologies and strengthen their corporate and human capital capacities. The focus will be on producing customised development programme proposals for global clients interested in achieving sustainable development goals. Leading technical assistance, training and advisory services will be at the forefront of the offer. So far, we have started transferring our knowledge and technical know-how to three African countries in collaboration with international donors and local partners.
As a thought leader in microfinance, what do you perceive is the future of Islamic microfinance and what will it look like say 5 or 10 years from now?
Islamic microfinance represents the confluence of two rapidly growing industries: microfinance and Islamic finance. It has the potential to not only respond to unmet demand, but also to address some weaknesses of conventional system in alleviating poverty and achieving positive economic impact. It is true that Islamic microfinance is still in its infancy and has yet to reach scale as Islamic microfinance industry accounts for less than 1% of the global microfinance outreach. However, I expect it will continue to grow at double-digit figures to finally emerge from a market niche to a rapidly growing industry worldwide within 5 to 10 years due to the following reasons:
- Microfinance in general and Islamic microfinance in particular remain important tools in tackling poverty, reducing financial exclusion and promoting social inclusion. The key role of microfinance in these areas was first recognised in the United Nations Millennium Development Goals (MDGs) then confirmed in the United Nations Sustainable Development Goals (SDGs). Since Islamic microfinance is said to emphasise more on ethical, moral and social factors to promote equality and fairness for the prosperity of the society; one can view it as offering a better financing tool compared to the conventional microfinance system and therefore it is more in line with SDGs.
- The current state of many Muslim countries provides Islamic microfinance institution (IMFIs) without a choice but to continue their best to fight poverty and serve the poor. IMFIs are not only working in an economically or politically demanding environment, i.e. high poverty or unemployment rate, but also providing services in hostile environment caused by prolong armed conflicts or recurring natural disasters. In fact, with an estimated 650 million Muslims living on less than US$2 a day, 89 million Muslims need urgent humanitarian relief. With 36 armed conflicts out of 50 are happening in Muslim countries, 60% of refugees in the world are concentrated in Muslim world, 20% to 40% of poor population cite religious reasons for not seeking conventional microfinance; the need to bring together faith and finance is clear and obvious. Islamic microfinance fits into the asset-based economic paradigm and equity objective of Islamic moral economy as well as fulfilling all other social expectations.
- At the country level the role of Islamic microfinance is gradually gaining momentum, especially in countries where microfinance sector is near maturity such as Bangladesh, Indonesia and Sudan. Here, IMFIs are seen to improve lives and income level of the poor, and at the same time contribute positively to employment creation in the country.
- Severe criticisms have been addressed to Islamic banks and other prominent Islamic financial institutions for their ‘failure’ to serve the 650 million poor in the Muslim countries. Therefore, it is expected that Islamic banks will invest more in the Islamic microfinance sector as it is often held up by industry practitioners and policymakers as the shining example of the social and participatory nature of Islamic finance. It is also said to be at the heart of Islamic finance as it addresses one of the fundamental roles of financial intermediaries demanded by Shari’a – income growth, functional distribution of income and promoting equal opportunities for all members of society as positive measures to improve the life of the poor. Moreover, Islamic microfinance has the potential to increase the overall market share of Islamic banking and finance by bringing untapped populations into the formal financial services sector.
However, fundamental challenges need to be considered before Islamic microfinance sector could continue its rapid growth and impactfully embark on a journey of participating in achieving SDGs, namely: (i) Modern, attractive, flexible and easily adaptable regulation for the various types of microfinance investment vehicles along with a friendly tax regime; (ii) More aggressive involvement from development donors and Islamic financial institutions particularly banks in the Islamic microfinance sector; (iii) Extensive use of technology and innovation; (iv) Innovation in terms of products delivery and business models; (v) Wider outreach; (vi) Better organisational efficiency; (vii) Better governance and increased stakeholder responsibility; (viii) Market data collection and standardisation; (ix) Increase diversity of the sector’s funding sources; and (x) Investment in human capital and talent development.
Sustainability has gone mainstream now. In part, the pressure to embrace sustainability has been catalysed by the desire for a sustainable future. What does sustainability mean to you as a leader? Why is sustainability becoming an important component of strategic thinking for leaders of today?
For me, sustainability is the development that meets the needs of the present without compromising the ability of future generations to meet their own needs. We must simply consider the future when it comes to making our decisions about the present. Sustainability is also the ‘’duty of care’’ regarding how we operate. Companies should always consider the three Ps of the triple bottom line while attempting to lead a successful and sustainable business: People, Planet and Profit. Seen from another angel, sustainability is about freeing people from the fear of uncertainty.
As a CEO of an EE institution, sustainability could be also translated into the 17 SDGs adopted by the United Nations, which include amongst other things:
- The end of poverty and hunger
- Better standards of education and healthcare
- To achieve gender equality
- Sustainable economic growth while promoting jobs and
stronger economies
- All of the above and more while tackling the effects of climate change, pollution and other environmental factors that can harm and do harm people’s health, livelihoods and lives.
- Sustainability to include health of the land, air and sea.
Sustainability is important because after all our businesses can only be as strong and healthy as the communities that we proudly serve. In a free enterprise, the community is not just another stakeholder in the business but in fact the very purpose of its existence.
What is the key to sustainability for Islamic microfinance institutions the likes of Zitouna Tamkeen?
Islamic microfinance institutions likewise Zitouna Tamkeen are usually small and relatively young corporations where the sustainability concept is not so deeply embedded in their corporate DNA. Therefore, I believe that the CEO’s role is most important in ensuring corporate sustainability. Corporate sustainability can be achieved by implementing the concept of triple bottom line, i.e. people, planet and profit. CEOs play a pivotal role in clarifying and motivating their teams to adopt it as a strategic concept. A CEO is also the person to impress upon the top management team the importance of social, environmental and ethical aspect of corporate governance.
According to a survey conducted by Accenture and UN Global Compact, 93% of CEOs view sustainability as critical to their company’s success. And yet, there is scant evidence that it has been implemented extensively at most companies. I believe this gap exists because most CEOs do not recognise the leadership role they personally need to play to embed it deep and wide in their organisations. Why is that? By and large, it’s because for most employees, the issue is still not considered relevant to the business, and they do not make a connection between sustainability and the company’s mission, or to their own day-to-day jobs. So, unless employees – at every level – see CEO leadership, they are not going to engage and drive change. But that does not mean that if the CEO doesn’t provide active and visible leadership, nothing can get done. It just doesn’t get as far or far enough.
As CEO, how do you balance the need to challenge staff but not overwhelm them?
As a CEO, I have to ensure that my employees feel challenged with their jobs, but not overwhelmed. To achieve this goal; creating a clean, well-maintained, and organised working environment where they can do their work and feel comfortable is a must. Practically speaking, the following leadership keys are essential:
Delegate wisely – I have learned to effectively delegate both the responsibility for completing assignments and the authority required to get things done. Controlling every little thing that employees do is a big mistake. When I delegate work to employees, I multiply the amount of work I can accomplish while I develop my employees’ confidence, leadership and work skills.
Set goals – Every employee needs goals to strive for. Goals ensure that they are working towards the overall organisational goals. I set specific and measurable goals with my employees, then regularly monitor their progress toward achieving them.
Communicate – I make every effort to get employees the information they need to do their jobs quickly and efficiently.
Make time for employees – Above all, leadership is a people job. When an employee needs to talk with me – whatever the reason may be – I make sure that I set aside the time to do so and focus on the person standing in front of me.
Don’t take it all too seriously – Without a doubt, running a company is a serious business. However, I don’t miss any opportunity to make Zitouna Tamkeen a fun place to work in, because of which we end up with a more loyal and energised workforce.
How do you empower your people to bring their ideas forward?
Our slogan at Zitouna Tamkeen is Part of building an empowering environment is dependent on the leader’s ability to run interference on behalf of the team. The leader needs to make sure people are safe doing their jobs and bringing their ideas forward. To make sure this happens in Zitouna Tamkeen; ongoing discussions of the needs, opportunities, tasks, obstacles, projects, what is working and what is not working are absolutely critical to the development and maintenance of a “safe” working environment. As a CEO, I have to also make sure that my people are empowered to make decisions, share information and try new things.
“You are never too young to lead and never too old to learn.”
Part of building an empowering environment is dependent on the leader’s ability to run interference on behalf of the team. The leader needs to make sure people are safe doing their jobs and bringing their ideas forward. To make sure this happens in Zitouna Tamkeen; ongoing discussions of the needs, opportunities, tasks, obstacles, projects, what is working and what is not working are absolutely critical to the development and maintenance of a “safe” working environment. As a CEO, I have to also make sure that my people are empowered to make decisions, share information and try new things.
Based on my experience, there are five things successful leaders do to build environments that empower people. First is to give power to those who have demonstrated the capacity to handle the responsibility. Second is to create a favourable environment in which people are encouraged to grow their knowledge, skills and expertise. Third is not to second-guess others’ decisions and ideas unless it’s absolutely necessary. This only undermines their confidence and keeps them from sharing future ideas with you. Fourth is to give people discretion and autonomy over their tasks and resources. Lastly is to recognise, reward and encourage employees often and openly when they put in extra efforts.
If you could rewind the clock to when you first took on a leadership role, what advice would you give yourself about being an effective leader?
My advice is be mindful about the individual leader or manager you choose to work for. Based on my experience, and hearing from leaders I’ve worked with, the person you choose to work for is a critical leadership decision. While you may possess strong leadership attributes yourself, they will either be amplified by a great leader, or suppressed by a weak or mediocre leader.
Great leaders will unleash your potential. They will actively look for ways to give you exposure to other senior leaders in the company. They will coach you, give you the tough feedback when you need it, and they will always be in your corner. These are the things you need to be looking for in the leaders you choose to work with. If you aren’t convinced that a prospective manager or leader will do these things for you, then my advice is to run, and run fast.
What habits have you included in your daily routine to strengthen your leadership skills?
Being an effective, inspiring, and well-respected leader for your company is not easy. Therefore, leaders should on a daily basis work hard to strengthen their leadership skills. For myself, I try to include some habits in my daily routine to improve my leadership skills and style.
Lead by example. Einstein said:
“Being an example is not a way of influencing others, it is the only way.”
As a leader I need to show, not just tell. I must set the tone and my employees will follow it.
Communicate effectively. Effective communication is imperative, both in the office and in life. I make sure I am heard and understood, but I also know the importance of listening.
Be a mentor to others. Establishing myself as a leader means I’m willing to help other people become leaders too.
Make tough decisions. Leaders are often the ones that can move forward with making tough decisions that others are afraid to make. Making tough decisions is one of the most important things I can do.
Make integrity a cornerstone. Integrity is the quality of being whole or undivided. Integrity for me is always doing the right thing, even when no one is looking. Integrity is when my actions are congruent with my values.
Share your enthusiasm. I don’t miss any opportunity to share my enthusiasm with the staff. People want to be associated with enthusiastic people because enthusiasm truly is contagious. It creates an energy and excitement that dissolves adversity and brightens up life.
Lead Courageously. Being a leader is about doing. It’s about getting things done. Courage (contrary to popular belief) is not ‘not being afraid.’ Courage is being afraid and doing it anyway. A lack of courage allows fear to stop all action, all doing, all getting things done. Leaders who do not have courage, are not leaders at all.
At the end, what is one piece of advice you would give to an aspiring leader?
If I have one piece of advice to give to an aspiring leader, I would say listen to your inner voice no matter how loud external noises are. Let your fear know your strengths and try to find the superpower that will allow you to do something you’re really proud of, that you can point to as your greatest accomplishment.
Be passionate about what you do, which means you have to care about succeeding. You need the courage to initiate, the commitment to do the hard-yards, and the tenacity to see things through in the face of obstacles.
