Interview: Mohamed Agrebi

In what ways can digitalisation help to meet the liquidity needs of the economy?

MOHAMED AGREBI: The notes and currency presently in circulation amount to TD12.5bn ($4.3bn). This level has been disproportionate to the needs of the economy since 2011. While a slowdown in the growth rate of the currency in circulation occurred in 2018, large-scale informal activity and tax evasion continue to weigh on bank liquidity.

In addition to regulatory and legal measures – such as the TD5000 ($1740) cap on the use of cash for certain transactions – digitalisation is a major focus of maintaining recurrent liquidity flows in banking and finance, and it has become one of the pillars of the de-cashing strategy led by the Central Bank of Tunisia.

The outcomes of digitalisation on liquidity levels are expected to be positive. Digitalisation favours maintaining monetary flows as a result of dematerialised transactional support. Moreover, it contributes to increased monetary flows by expanding financial inclusion. Banks have a role to play in the development of digital products like mobile payments, which should positively affect both inclusion and bank liquidity.

What can be done to develop the financial technology (fintech) in use in Tunisia?

AGREBI: Transitioning towards a digital economy is one of the major axes of Tunisian development policy, notably driven by the Digital Tunisia 2020 plan, and includes the more widespread use of fintech. Tunisia can leverage several assets to develop these tools. First, the country can rely on its high-quality education system, especially in digitalisation, as shown by the number of engineers graduating from Tunisian universities whose skills are nationally and internationally recognised.

Second, the advantages and incentives offered by the legal framework of the Start-up Act have created a favourable climate for the development of young companies, which could greatly strengthen Tunisia’s regional positioning, especially within the digital field.

Lastly, various institutions are mobilising in favour of entrepreneurship, and several companies have been involved in the support of entrepreneurs. Tunisia offers comprehensive incubation programmes, such as Flat6Labs or B@Labs, for young entrepreneurs who want to develop their ideas and projects.

How can small and medium-sized enterprises (SMEs) attain greater access to finance?

AGREBI: Banks have an important role to play in encouraging the development of start-ups and SMEs. However, facilitating access to credit is a shared responsibility. SMEs often need to strengthen their financials and recapitalise, and a fund for the growth and restructuring of SMEs was created in 2018. Banks also have a role to play in advising the managers of SMEs on diversifying their businesses, internationalisation and establishing financial arrangements.

Moreover, Tunisian authorities have established a legal framework to restructure microfinance and expand the sector’s stakeholders, which has contributed to the emergence of important microfinance players. However, this framework must be strengthened by putting appropriate prudential rules in place and addressing the resource issues these institutions face.

What role can banks play in optimising the working capital requirements (WCRs) of SMEs?

AGREBI: WCRs are investments a firm needs to make to continue its operations by satisfying both short-term debt and upcoming operational expenses. They are imperative because of the intensity of market competition, and they ought to be properly sized and controlled. To prevent companies from giving up their commercial development because of the impossibility of financing a WCR, banks should help SMEs to better control these investments and guarantee their financial equilibrium. Furthermore, banks are equipped to offer bespoke support to help these customers optimise their WCRs.