Banking
From The Report: Tunisia 2017
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The banking sector in Tunisia has benefitted from a history of relative stability, thanks to a steady hand from the regulator, a focus on banking fundamentals and a comparatively high level of sophistication, particularly in terms of services like leasing. In 2016 several indicators continued to rise, including assets and lending. However, creeping weaknesses, in terms of both public sector institutions and competition, have become more prevalent and are prompting a period of change. The industry, which is currently facing a tight liquidity environment, is also widely thought to be ripe for consolidation, though new players continue to enter the market, attracted in part by the limited level of financial inclusion, which points to extensive greenfield opportunities. Changes such as the recent recapitalisation and restructuring of the country’s public banks, and plans to move the sector towards Basel III norms by 2020 should all help reinforce the stability of the banking system in the years ahead.

This chapter contains interviews with Chedly Ayari, Governor, Central Bank of Tunisia; and Ahmed El Karm, President, Tunisian Professional Association of Banks and Financial Institutions.

Articles from this Chapter

Overview

Top down: Recent reforms are putting the sector on firmer footing
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The banking sector in Tunisia has benefitted from a history of relative stability, thanks to a steady hand from the regulator, a focus on banking fundamentals and a comparatively high level of sophistication, particularly in terms of services like leasing. In 2016 several indicators continued to rise, including assets and lending. However, select weaknesses, in terms of both public sector institutions and competition, have become more prevalent and are prompting a period of change. June 2016…

Interview

Hitting the target: Chedly Ayari, Governor, Central Bank of Tunisia (Banque Centrale de Tunisie, BCT), on supporting the banking system and new regulations
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Interview: Chedly Ayari To what extent will the BCT improve liquidity within Tunisia’s financial sector? CHEDLY AYARI: Improving the liquidity of the financial system and relieving some of the pressure on the foreign exchange market will depend on the recovery of Tunisia’s most distressed sectors, which include mining, oil and gas, and tourism — Tunisia’s main traditional sources of foreign currencies. Until late 2010 the savings generated by institutional entities such as state-owned companies…

Analysis

By the book: A new banking law provides clearer guidelines for investors and financial institutions
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In June 2016 Tunisia’s Parliament adopted a wide-ranging piece of new financial sector legislation, the New Banking Law No. 2016-48, which went into effect the following month. The law not only brings about a number of sizeable amendments to existing rules and regulations, but also lays out new frameworks for non-banking institutions and sharia-compliant services, as well as provides more detail on regulatory interventions. Oversight & Reforms Notable changes in the law include revisions…

Analysis

Think small: More banks are looking to improve funding for small and medium-sized businesses
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As in many countries, and emerging markets in particular, Tunisian small and medium-sized enterprises (SMEs) can struggle to access bank financing. According to International Financial Corporation figures, close to 30% of Tunisian micro-enterprises and SMEs lack any form of access to credit. However, the government is working to improve such access, and a number of initiatives under way or in the pipeline should help to boost levels of financing in the coming years. State Support Since…

Interview

Modern-day focus: Ahmed El Karm, President, Tunisian Professional Association of Banks and Financial Institutions, on current laws and initiatives
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Interview: Ahmed El Karm What is your assessment of the authority given to the central bank by the new banking law? AHMED EL KARM: The new banking law gives too much supervisory authority to the Central Bank of Tunisia (Banque Centrale de Tunisie, BCT) over management decisions. For example, banks must seek authorisation to introduce new products, modify fees, open new branches, develop new digital channels, determine compensation and appoint administrators and directors. This transfer of authority…