Determinants of success for microcredit-funded projects: evidence from Tunisia’s BTS program

Purpose This study aims to examine the determinants of success for entrepreneurial projects financed by Tunisia’s Banque Tunisienne de Solidarité (BTS) between 2015 and 2024, integrating insights from human capital theory, dynamic capabilities theory, signaling theory and the resource-based view. Design/methodology/approach Using a binary logistic regression, we analyze a unique dataset of 4,180 BTS-financed projects, combining administrative records, field surveys, and national statistics. The explanatory variables capture individual characteristics (education, entrepreneurial experience and gender), economic factors (initial capital, sector and business plan) and contextual factors (rural location, loan repayment terms and crisis-period launch). Findings The results show that education, prior entrepreneurial experience and professional training significantly increase project success, while female gender, rural context and crisis-period initiation significantly decrease it. Other factors such as mentoring, initial capital and sector have no robust effects. Research limitations/implications This study is limited by its cross-sectional design, which restricts causal inference and long-term assessment of project trajectories. Unobserved heterogeneity may persist, and success is measured primarily through repayment and continuity. Future research should employ longitudinal, causal and multidimensional approaches to capture broader impacts. Practical implications The findings highlight the need for microfinance programs to integrate tailored training, mentoring and gender-sensitive measures. Flexible repayment schemes and crisis-responsive instruments could mitigate risks, while early-warning monitoring and broader policy linkages would enhance feasibility. Future research should prioritize longitudinal and causal designs. Originality/value This is the first large-scale, nationally representative study of BTS outcomes to jointly test multiple theoretical frameworks with econometric evidence. It provides actionable insights for policymakers and practitioners to optimize Tunisia’s microfinance system and enhance its contribution to inclusive development.