The Tunisian Banking Sector: Challenges and Opportunities

Regulatory Framework

The Central Bank of Tunisia (BCT) has implemented a series of reforms aimed at strengthening the banking sector. These measures include:

• Separation of roles: The BCT has separated the roles of chairman and director-general to improve governance and decision-making.
• Deposit guarantee fund: A deposit guarantee fund has been created to protect depositors in case of bank failures.
• Increased prudential rules: The BCT has introduced stricter prudential rules to enhance risk management and stability.

Consolidation

The BCT is pushing for consolidation in the banking sector, with the goal of creating stronger players that can better withstand economic shocks. However, this effort is hindered by large conglomerates that are major stakeholders in some banks.

Microfinance

Microcredit has experienced rapid growth since 2011, with a loan portfolio exceeding TD1bn ($347.3m) and around 600,000 customers. To achieve broader financial inclusion, microfinance institutions need to provide other products like savings and insurance.

Fintech

Fintech operations are helping to bridge gaps in the unbanked population, and regulators are updating rules to keep pace with new developments in fintech.

Islamic Finance

Islamic banking is growing rapidly, with a growth rate above that of the broader sector. It’s estimated that sharia-compliant banks will account for around 15% of total banking assets by 2022.

Leasing Segment

The leasing segment has grown consecutively, but it faces challenges due to liquidity problems in the economy, which may impact leasing companies’ ability to repay their financing.

Conclusion

The Tunisian banking sector is facing significant challenges, but emerging segments like microcredit, Islamic finance, and fintech offer opportunities for growth. The sector’s largest players will likely focus on adapting to new regulations and aligning with Basel III requirements in the immediate future.