Banking
From The Report: Tunisia 2016
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The Tunisian financial services industry, of which banking is by far the largest component, accounted for 3.7% of the country’s GDP in 2014. Sector activity rose by 3.8% in 2014 and a further 3.3% during the first nine months of 2015 compared to the same period a year earlier. The sector’s trajectory is largely positive, with lending and leasing activity growing rapidly in recent years, but the stability and profitability of the sector has been negatively affected by poor performance at several large state-owned banks as well as by market fragmentation. However, year 2015 saw several of these institutions recapitalised alongside changes made to their management structures. The recapitalisation of key public banks is set to return the sector to comparative health as well as help to address the wider issue of tight liquidity in the market. While it is uncertain if management changes at the banks can ensure they do not again start to build up poor loan books, the improvement of the democratic environment should reduce pressures for politically-connected lending that occurred in the past. This should in turn help to bolster financial sector stability, as should plans to raise prudential ratios under the new banking law, which will also help to support continued rapid growth in emerging niches including Islamic banking and leasing. This chapter contains interviews with Chedly Ayari, Governor, Central Bank of Tunisia (CBT); and Ahmed Rjiba, CEO, Banque de l’Habitat.

Articles from this Chapter

Overview

Positive moves: Measures to address tight liquidity and expected regulatory changes are set to bring the sector back to health
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While it is a crowded market, 11m-person Tunisia has long had one of the most developed banking sectors in North Africa, with a range of commercial banks, offshore lenders, leasing companies, sharia-compliant institutions and microfinance firms targeting a wide variety of segments. The Tunisian financial services industry, of which banking is by far the largest component, accounted for 3.7% of the country’s GDP in 2014. Sector activity rose by 3.3% in real terms during the first nine months of…

Analysis

Building blocks: A number of approaches aim at improving financial inclusion
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Although Tunisia is home to a large number of locally and foreign-backed banks from the public and private spheres, access to financial services remains difficult for many. The World Bank describes inclusive financial services in the country as “fragmented, incomplete and difficult to access”, and the proportion of Tunisians formally involved in the financial system is low in comparison to neighbouring states. The World Bank’s Financial Inclusion Index found that 27.3% of adults held accounts…

Analysis

Lifelines: Addressing impediments to financing for small businesses
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Access to finance for Tunisian firms is broadly good by regional standards. While 23.9% of firms surveyed by the World Bank’s 2013 Enterprise Survey identified access to finance as a major constraint, this was substantially below the MENA region’s average of 35.7%, and 53.6% had a bank loan or line of credit, more than double the regional average of 25.6%. However, as is common in many emerging markets, the situation remains more difficult for the country’s small and medium-sized enterprises…

Interview

Balance and stability: OBG talks to Chedly Ayari, Governor, Central Bank of Tunisia (CBT)
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Interview: Chedly Ayari How can the fluctuation in the dinar/dollar exchange rate be adjusted? CHEDLY AYARI: Tunisia’s exchange rate policy framework seeks to secure external financial equilibrium through the preservation of the real value of the Tunisian Dinar, which should reflect the fundamentals of the Tunisian economy and maintain international competitiveness. To achieve this, the CBT can intervene to regulate the market. Its interventions are made at the interbank exchange rate level.…

Interview

Factoring in: OBG talks to Ahmed Rjiba, CEO, Banque de l’Habitat
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Interview: Ahmed Rjiba Which measures can be taken to increase the volume of liquidity in the Tunisian banking sector and increase investor confidence? AHMED RJIBA: Today, the lack of confidence on the back of the economic downturn and the security situation has resulted in a dearth of financial resources in the banking system. Under these circumstances, banks are trying to collect a maximum of savings by opening branches nationwide – a challenge since national savings represented only 15% of…