Insights from HiiL’s Justice Needs and Satisfaction study of MSMEs
HiiL has released new findings on the justice needs of micro, small and medium enterprises in Tunisia, based on interviews with more than two thousand business owners across the country. The picture that emerges is clear. Everyday legal problems are cutting into productivity, slowing growth, and shaping the decisions of thousands of entrepreneurs. Since MSMEs make up ninety seven point four percent of Tunisia’s private sector and provide almost all private employment, these pressures affect the very core of the economy. The scale of legal problems is substantial. More than half of all surveyed businesses had faced at least one serious legal issue in the two years before the interview. Among informal businesses the figure rises to sixty one percent, with the most common consequence cited being the loss of clients.
Two different journeys through the justice system
The study highlights clear differences between the problems faced by formal and informal businesses. Formal businesses mostly grapple with issues tied to regulation and contracts. Contract disputes alone affect fifty one percent of firms with legal problems and are identified as the most serious problem for twenty eight percent. They also report more tax related and competition issues. Informal businesses face a wider set of challenges linked to exposure and instability. Crime, debt and financing difficulties, and disputes over workplace location appear frequently. Harassment from authorities or others is also a common concern. Debt and financing stand out as the most serious problems for sixteen percent of informal firms. Male owned informal businesses show even higher levels of pressure in areas such as workplace location, compliance, safety, and crime.
A major resolution gap
Perhaps the most urgent finding is the extremely low resolution rate across the sector. Around eighty percent of all legal problems are either still ongoing or have been abandoned. Only one in five is considered resolved even partially. Many businesses simply step back from their most serious problems, especially informal firms. Formal firms are slightly more likely to keep problems open without closure. Even when a case does reach an outcome, many owners say the result did not feel fair. The reasons behind this are widespread and persistent.
- Businesses expect that taking action will not lead to a positive result.
- Many cannot afford the process at all.
- Formal firms face long delays and high costs.
- Informal firms add two further barriers, low awareness of the law and limited confidence in the system.
These factors create a cycle in which problems remain unsettled, uncertainty grows, and firms hold back on investment and innovation.
Low use of legal help
While the challenges are significant, MSMEs still prefer to manage problems through direct negotiation. This is the first choice for fifty nine percent of formal firms and sixty eight percent of informal firms that take action. Awareness of support services is very low. Only sixteen percent of formal firms and eight percent of informal firms know these services exist. Actual use is even lower, with nine percent of formal firms and two percent of informal firms using any form of legal support in the past two years. Many informal owners avoid courts entirely because they believe their status prevents access. When people do seek help, lawyers tend to be the most useful source, while satisfaction with police and government agencies is much lower.
What Tunisia can take from the findings
The evidence points to several priorities that can make justice more workable for MSMEs and strengthen the economy.
- Services tailored to informal businesses that resolve disputes quickly and offer simple links to formalisation.
- Clear information on rights and available services, together with practical improvements that build trust.
- Easier procedures for formal businesses, supported by digital tools that cut time and cost.
- Integrated legal guidance within economic programmes to help businesses navigate debt, contracts, and registration.
Moving from data to action
For HiiL, this report marks the start of the next phase of the People centred justice programme for MSMEs in Tunisia. The work now moves into co designing solutions with entrepreneurs, developing and testing ideas through Justice Innovation Labs, and supporting practical interventions through the Justice Accelerator.The full JNS provides detailed data, trends, and guidance for anyone working to strengthen Tunisia’s business environment. Readers who want to dive deeper into the evidence can download the complete study here.
