Tunisia’s Banking Sector: Challenges and Opportunities

The Tunisian banking sector is a highly competitive market with multiple players, presenting both challenges and opportunities for growth.

Challenges in the Sector

• High number of players: The presence of 23 commercial banks operating in Tunisia creates difficulties in achieving consolidation and economies of scale.
• Mixed results from prudential rules: While stricter deposit-to-credit ratios have led to a reduction in credit allocation and an increase in provisions, they have also negatively impacted banking stocks.

Opportunities Emerging in Specific Segments

Islamic Finance

• Rapid growth: Sharia-compliant banks account for approximately 6.5% of total banking assets.
• Increasing demand: The demand for sharia-compliant financial services is likely to continue growing in Tunisia.

Microcredit

• Significant growth: The loan portfolio has exceeded TD1bn ($347.3m), and over 600,000 customers have been served as of April 2019.
• Financial inclusion: Microcredit has contributed to increasing financial inclusion in Tunisia.

Fintech Operations and Non-Bank Payment Branches

• Reaching unbanked populations: Fintech operations are being deployed to reach unbanked populations and increase financial inclusion.
• Expanding access: Non-bank payment branches are being established to provide alternative channels for financial services.

Key Statistics

• 23 commercial banks operating in Tunisia
• 36% of Tunisians part of the formal financial sector in 2018 (World Bank study)
• TD1bn ($347.3m) loan portfolio for microfinance segment as of April 2019
• Over 600,000 customers for microfinance segment as of April 2019
• 6.5% of total banking assets accounted for by sharia-compliant banks in late 2016
• TD4.5bn ($1.6bn) total lending by leasing firms to the economy in 2018