Banks in Tunisia are the cornerstone of financial intermediation, and bank loans are the main source of financing for Tunisian companies. Twenty-two domestic banks account for 96% of banks’ assets, including five state‑owned lenders, five banks whose largest shareholder is a Tunisian private investor, nine banks controlled by non-Tunisian investors, and three mixed banks jointly controlled by the Tunisian state and another Arab country. The overall profitability of listed banks, which account for more than 80% of the country’s banking assets, increased in the years leading up to the onset of the COVID‑19 pandemic. This chapter describes the economic environment in which this review was carried out. It also provides an overview of Tunisia’s retail banking sector, including a description of the main players, the overall profitability of listed banks, and the institutional and regulatory framework.
Competition Market Study of Tunisia's Retail Banking Sector
2. The retail banking sector in Tunisia
Abstract
2.1. Economic environment
The economic situation in Tunisia, like that in other countries, has been negatively impacted by the COVID‑19 pandemic. According to the OECD’s 2022 Economic Survey of Tunisia, the country’s GDP fell 8.8% in 2020 as economic activity shrunk across most sectors before rebounding 2.9% in 2021. In 2022, public debt increased by around 20 percentage points to almost 90% of GDP. Unemployment reached 16.2% in 2021 (see Figure 2.1).
Figure 2.1. Key economic indicators, 2015‑22
Source: OECD (2022[1]). OECD Economic Surveys: Tunisia 2022, https://doi.org/10.1787/7f9459cf-en.
Tunisian authorities have implemented policies to mitigate the effects of the COVID‑19 pandemic on households and businesses (OECD, 2022[1]), including a fiscal package that amounted to 4.3% of GDP in 2020. As in other jurisdictions, these subsidies have been gradually replaced by more targeted support for vulnerable households and enterprises. The Central Bank of Tunisia eased monetary policy to support financial conditions, cutting the benchmark lending rate by 100 basis points in March 2020 and by a further 50 basis points in October 2020 (see Figure 2.2). However, growing inflationary pressures led the BCT to raise interest rates at the end of 2022 and beginning of 2023.
Figure 2.2. Base interest rate, savings rate and money market rate
Sources: BCT, National Institute of Statistics, Refinitiv.
Since the onset of the pandemic, Tunisian sovereign debt has come under pressure, having been downgraded several times between 2020 and 2023, according to Fitch Ratings and Moody’s. As of June 2023, Moody’s rating is Caa2 and Fitch’s rating is CCC-, indicating substantial risk of default (Fitch Ratings, 2023[2]). Tunisia also experienced rising inflationary pressures in 2022 and at the beginning of 2023 due to global increases surveys in food and energy prices, and difficulties accessing financial markets have resulted in a major grain supply shock.
The government has benefitted from loans granted by both domestic banks and international organisations. These include:
Domestic lenders granted three syndicated loans between January 2020 and February 2021 of more than EUR 1 billion to help finance the state budget amid restricted access to international capital markets (Banque Centrale de Tunisie, 2022[3]).
In April 2020, the executive board of the International Money Fund (IMF) approved a USD 745 million emergency assistance loan to support Tunisia’s proactive policy response to the COVID‑19 pandemic (International Monetary Fund, 2020[4]).
The World Bank approved budget support of USD 175 million under its Resilience and Recovery Emergency Development Policy Operation in June 2020 (World Bank, 2020[5]) and a USD 130 million loan for food security in June 2022 (World Bank, 2022[6]).
In October 2022, Tunisian authorities and IMF reached a staff-level agreement to grant a USD 1.9 billion fund facility (International Monetary Fund, 2022[7]), conditional on the implementation of several economic and social reforms (International Monetary Fund, 2022[8]). As of June 2023, the deal had not been approved (International Monetary Fund, 2023[9]).
2.1.1. Previous reviews of the banking sector in Tunisia
Although this is the first competition market study of Tunisia’s retail banking sector, several reviews of the sector have been performed by international organisations over the last 10 years. The list below includes a selection of these reviews, starting with the most recent.
A 2021 report by the World Bank identified several factors preventing Tunisian banks from performing effective and efficient financial intermediation. These included the absence of a private credit information bureau, difficulties enforcing collateral rights, and a cap on lending interest rates (World Bank, 2021[10]).
In 2018, the European Bank for Reconstruction and Development (EBRD) found that limited access to finance was a major obstacle for the private sector, exacerbated by the cap on lending interest rates. In addition, the EBRD highlighted the weak prudential position of banks and the high level of non-performing loans (NPLs) caused by, among other things, subsidised loans from public banks to the tourism sector in the 1980s and loans to related borrowers in the 1990s and 2000s (Morsy, Kamar and Selim, 2018[11]).
In 2015, the World Bank recommended a series of reforms to improve financial inclusion in Tunisia (World Bank, 2015[12]). These included the creation of a financial inclusion champion with the ability to bring together a diversity of public and private institutions and to allow the development of a varied range of financial services. The report advocated a bigger role for La Poste Tunisienne in the provision of banking services and the development of legislation to encourage mobile payments and digital financial services.
In 2015, the European Investment Bank estimated that around one‑quarter of Tunisia’s small and medium-sized enterprises (SMEs) regarded access to finance as a major or severe obstacle to the operation of their business (European Investment Bank, 2015[13]).
In 2014, the World Bank recommended a restructuring of state‑owned banks, stronger enforcement of banking regulation, the modernisation of Tunisia’s bankruptcy regime to improve debt recovery and to reduce banks’ risk aversion, and the introduction of private credit bureaus to reduce information asymmetries between borrowers and lenders (World Bank, 2014[14]).
The recommendations of the IMF in its 2012 review of Tunisia’s financial system stability included a restructuring of the balance sheets of state‑owned banks, a restructuring of their governance, and a strengthening of bank supervision (International Monetary Fund, 2012[15]).
This report will refer to these reviews in more detail on selected issues as appropriate.
2.2. Overview of the banking sector
This section provides a high-level overview of the retail banking sector in Tunisia. The section first covers banks and presents a brief description of their business models and their overall profitability. The section then moves to look at other institutions that provide financial services to micro, small and medium-sized enterprises (MSMEs) and to consumers.
2.2.1. Banks
As of June 2023, the financial sector in Tunisia comprised 46 financial institutions, including:
22 domestic banks
seven offshore banks1
eight leasing companies
two factoring companies
two investment banks2
five payment service providers.
Banks are the cornerstone of financial intermediation in Tunisia in the absence, or very limited development, of other channels (OECD, 2018, pp. 83-89[16]). In 2021, domestic and offshore banks owned more than 96% of Tunisian financial sector assets and issued more than 95% of credit. The asset and credit shares of leasing and factoring companies fell between 2018 and 2021 (see Table 2.1).
Table 2.1. Distribution of total assets and credit by type of financial institutions
Note: Banks refers to all institutions with a banking licence to operate in Tunisia. Total may not add up to 100 due to rounding.
Source: BCT (2022, p. 56[17]), Rapport Annuel sur la Supervision Bancaire : Exercice 2020 ; BCT (2022, p. 58[18]), Rapport Annuel sur la Supervision Bancaire : Exercice 2021.
Tunisia’s 22 domestic banks account for 96% of banks’ assets and include:
five state‑owned banks (of which the majority shareholder is the Tunisian state);3 two of the five state‑owned banks are development banks4 (see Section 2.3.1 for more details on development banks).
five banks of which the largest shareholder is a Tunisian private investor.
nine banks controlled by non-Tunisian investors.
three mixed banks jointly controlled by the Tunisian state and another Arab country.
Table 2.2 shows the banks’ ownership breakdown over time. Three domestic banks are Islamic banks (see Box 2.1 for a brief overview on Islamic finance and banking). The three largest foreign-owned banks are former state‑owned banks.
Tunisia’s state‑owned banks are formally separated banking institutions with a common owner, the Tunisian state. Table 2.2 counts them as separate institutions and Section 3.1 discusses the risks to competition arising from the state’s role as a sole common owner. The remaining banks do not have common majority shareholders, although some have minority shareholders in common. Section 3.3 discusses the risks arising from the existence of common minority shareholders.
Table 2.2. Breakdown of domestic banks by ownership, 2015‑22
Note: State‑owned lender Banque Franco-Tunisienne (BFT) was liquidated in April 2022.
Source: BCT (2021, p. 28[19]), Rapport Annuel sur la Supervision Bancaire : Exercice 2019 ; BCT (2022, p. 57[20]), Rapport Annuel sur la Supervision Bancaire : Exercice 2021.
Box 2.1. Islamic finance and banking
Traditional and Islamic finance providers coexist in many countries. Islamic finance is a way to manage money within the moral principles of Islam, also known as Shariah. Shariah does not allow the receipt or payment of riba (interest), gharar (excessive uncertainty), maysir (gambling), or activities or investments that are considered harmful to society, such as investment in alcohol or weapons.
Shariah-complaint financial products may work differently from traditional banking services. For example, a Shariah-complaint current or savings account does not pay interest but may give the customer access to interest-free loans known as qard. Islamic banks cannot invest deposits in anything that in Shariah is considered harmful, and they may pay customers a share of the profits they earn.
When a customer buys a home, an Islamic bank can offer alternatives to traditional mortgages. Either the bank can buy the property and then sell it to the customer at a profit, allowing the customer to pay the bank back in instalments, or the customer can buy the property together with the bank and then buy the bank out of its share over time.
The value of assets held by Islamic financial institutions globally almost doubled between 2015 and 2021, from USD 2.17 trillion to USD 3.95 trillion.
Sources: IMF (2017[21]), The IMF and Islamic Finance, https://www.imf.org/external/themes/islamicfinance/; Bank of England (2022[22]), , What is Islamic finance?, https://www.bankofengland.co.uk/explainers/what-is-islamic-finance; Refinitiv (2022[23]), Islamic Finance Development Report 2022: Embracing Change | Refinitiv, https://www.refinitiv.com/en/resources/special-report/islamic-finance-development-report-2022.
Figure 2.3. Distribution of banks’ main balance items, 2021
Note: (1) state‑owned banks; (2) banks whose largest shareholder is a Tunisian private investor; (3) banks controlled by non-Tunisian investors; (4) mixed banks.
Source: Refinitiv, OECD calculations.
Due to data limitations, a large portion of the analysis in this report focuses on the 12 banks listed on the Bourse des Valuers Mobiliéres de Tunis (BVMT), or Tunis Stock Exchange, which held more than 80% of banking assets in 2021.5 At the end of 2022, listed banks account for 43% of the exchange’s market capitalisation (BVMT, 2023, p. 80[24]). The largest bank had around 14% of the banking sector’s total assets in 2021 (see Figure 2.3). The second-, third- and fourth-largest banks are state‑owned and accounted for a combined share of more than 30% of banks’ total assets.
The size of Tunisia’s banking sector increased significantly over the decade to 2020. Although the total assets of non-listed banks recorded a stronger increase than those of listed banks, the former having almost tripled and the latter having doubled between 2010 and 2020, listed banks accounting for most of the increase in nominal terms. In relative terms, listed and non-listed banks’ total assets amounted to 86.6% in 2021 (IMF, 2021[25]).
The ratio of credit extended to private sector over GDP compares well to that in other Middle East and North Africa (MENA) region countries, but it is lower than the average in both the European Union and OECD economies (see Figure 2.4).
Figure 2.4. Tunisian financial intermediation vs. financial intermediation elsewhere
Note: Data for bank domestic credit-to-GDP are as of end‑2020.
Source: World Bank, Refinitiv.
Overall profitability
Competition authorities typically assess firms’ profitability in the relevant economic markets. High and sustained levels of profits can indicate that firms are able to exercise market power and increase prices significantly above costs. However, high profits can also be driven by factors other than a lack of competition, such as efficiency improvements, and profits – especially if they are enjoyed by a subset of firms – can be consistent with a well-functioning competitive process. Similarly, low levels of profit do not necessarily imply high levels of competition. For example, firms facing limited competition may not achieve high profitability if they are inefficient.
Profitability must be measured over a sufficiently long period. In markets in which firms can freely enter and exit, profits in the long run are expected to be equal to the cost of capital. In fact, if profits are persistently above the cost of capital, new firms would enter and make profits. Similarly, if profits are below the cost of capital, firms would exit. Over short periods of time, profits could diverge from the cost of capital because of economic cycles or the nature of markets (for example, in markets characterised by high levels of innovation). The focus of this competition analysis is therefore on the sustained nature of any high profits.
Establishing whether profit levels are high is not straightforward and typically involves three steps. The first step is to establish the level of profitability within the relevant firm or sector. The second is to establish a relevant benchmark for profitability. Finally, the level of profitability is compared with the benchmark over a significant period to establish whether returns appear high.
The data available to the OECD did not allow a detailed assessment of profitability. The remainder of this section relies on publicly available information and presents high-level profitability measures of Tunisia’s listed banks. The information is based on banks’ balance sheets and income statements, and it is not specific to the economic markets on which this report focuses. The analysis therefore provides background information for the remainder of the report. Despite the data limitations, the evidence shows levels of profitability inconsistent with high levels of competition. In fact, overall profitability measured using a variety of indicators increased in the years before the COVID‑19 pandemic and return on equity (ROE) is higher than in peer countries.
This section presents evidence on revenues and profitability across all activities of Tunisia’s listed banks. Chapter 4 presents information on revenues specific to current accounts.
Income sources of Tunisia’s listed banks
Retail banks typically rely on income earned from interest charged on loans to customers and on commissions and fees. Retail banks’ main costs include operating costs that relate to the costs of personnel, IT and property, and impairments, which are represented by losses on NPLs.
The total revenues of Tunisia’s listed banks have increased steadily since the Global Financial Crisis. Interest income represents the largest source of income and fluctuated between 50% and 58% of total revenues over the decade to 2021 (see Figure 2.5). This reflects extensive lending activity earning substantial revenues from the interest charged on loans to customers.
Figure 2.5. Tunisian listed banks’ revenues and net profits, 2012‑21
Note: Total revenues are calculated as the sum of interest and non-interest income less interest expenses. The chart shows the non-weighted averages of all domestic banks.
Source: BCT (2022[20]), Rapport Annuel sur la Supervision Bancaire : Exercice 2021.
Nevertheless, new banking business lines generating non-interest revenue have emerged, such as securities trading and investment banking. Although commissions and fees remained stable at around 20% of listed banks’ total revenues over the decade to 2021, the share of trading portfolio income increased from 4% in 2012 to 16% in 2021.
Profitability of Tunisian listed banks
A common measure of profitability in the banking sector is the net interest margin – the difference between interest earned on loans and interest paid on deposits – divided by average assets. Other measures of profitability commonly used include ROE, which captures factors such as operating costs and impairments, earnings before interest, taxes, depreciation and amortisation (EBITDA), and net operating income (net interest income plus net fee income). These indicators are accounting measures of profitability and differ from measures of economic profits typically used by competition authorities to assess profitability.
Despite the limitations, all measures show that listed banks’ overall profitability has increased:
Interest margin steadily increased from 2013 but were negatively impacted by the COVID‑19 pandemic (see Figure 2.6). Tunisian listed banks’ ROE continuously increased, from about 5% in the early 2010s to 9.1% in 2021, although it declined to 8.7% in 2020.
Considering individual listed banks, the ROE of the largest banks tends to be higher than that of small banks (see Figure 2.7). In addition, the ROE of listed state‑owned banks is lower than that of large non-state‑owned banks.
Banks’ net operating income has grown faster than Tunisia’s GDP, from TND 2 billion in 2010 (3% of GDP) to TND 5.6 billion in 2020 (4.7% of GDP; see Figure 2.8). The average ROE of Tunisian banks over the period 2015‑19 is slightly lower than 12%. This is comparable with countries in the MENA region for which data is available and higher than the average in OECD countries and the European Union (see Figure 2.9).
Figure 2.6. Tunisian listed banks’ revenues and net profits, 2012‑21
Note: Total revenues are calculated as the sum of interest and non-interest income less interest expenses. The charts show the non-weighted averages of all domestic banks.
Source: BCT (2022[20]), Rapport Annuel sur la Supervision Bancaire : Exercice 2021.
Figure 2.7. Tunisian listed banks’ return on equity, 2015‑22
Sources: Refinitiv; OECD calculations.
Figure 2.8. Tunisian listed banks’ net operating income, 2010‑21
Sources: Refinitiv; BCT; OECD calculations.
Figure 2.9. Tunisian listed and non-listed banks’ ROE vs. banks’ ROE elsewhere
Note: ROE is calculated as the ratio of net income to total shareholder equity. Average data for listed and non-listed banks are calculated over the period 2015‑19.
Source: World Bank Global Financial Development Database; OECD calculations.
Development banks
Two state‑owned banks in Tunisia have public policy functions. The Banque Tunisiennes de Solidarité (BTS), was established in 1997 and specialises in making small loans of up to TND 150 000 to professionals and micro‑enterprises that are unlikely to be able to access bank loans because of a lack of collateral. The BTS has 25 branches distributed across governorates.
The Banque de Financement des Petites et Moyennes Entreprises (BFPME), was established in 2005 to promote the growth of MSMEs and support their access to finance. The BFPME provides loans of between TND 100 000 and TND 15 million that cover up to 65% of the total cost of projects (European Investment Bank, 2015[26]). The BFPME finances only projects guaranteed by the Société Tunisienne de Garantie (SOTUGAR). Around 60% of its portfolio includes projects in non-coastal (less developed) areas6 (see Section 2.2.3 for a description of the SOTUGAR). Between 2005 and the end of 2020, the BFPME granted loans for around 1 600 projects (BFPME, 2023[27]). A large portion of BFPME loans is granted in partnership with commercial banks (mostly the three largest state‑owned banks and the three largest banks controlled by Tunisian investors).
Since 2017, the Ministry of Finance has been working on a project to create a Banque des Regions (BdR), or Bank of the Regions, which is supposed to merge the BTS, the BFPME and the SOTUGAR.
2.2.2. Other sources of corporate finance
Corporate financing comes from three main sources in Tunisia. Retained earnings is the main means by which companies can mobilise resources internally to finance investment, using net income remaining after the payment of expenses and obligations. Debt financing – funds companies raise by borrowing money through loans or corporate bond issuance – is a second source. The main source of financing for Tunisian corporates is bank loans. Equity capital – cash that public companies obtain by issuing shares – is the third key source of funds. The remainder of this section briefly discusses alternative sources of finance.
Equity market
Figure 2.10 shows that the size of Tunisia’s equity market in 2010 was around 20% of GDP, falling 6 percentage points by 2021. Tunisia’s equity market is small compared to those of other MENA countries and to the world average.
Figure 2.10. Size of Tunisia’s equity market vs. equity markets elsewhere
Sources: World Federation of Exchanges; IMF Economic Outlook Database; OECD calculations.
Corporate bond market
Tunisia has no corporate bond market. According to data from the World Federation of Exchanges, no capital was raised on the domestic corporate bond market in Tunisia over the period 2010‑20 and the number of bond issuers has consistently been zero.
Leasing
Leasing is a contractual arrangement whereby a customer (a lessee) obtains the right to use an asset owned by a leasing company (a lessor) subject to payment of periodic leasing instalments. It is typically used to acquire vehicles, industrial equipment or buildings. Leasing is often used by MSMEs because it allows them to use equipment without investing capital. As of June 2022, eight leasing companies were operating in Tunisia, and domestic banks are the main shareholders in six of them (MACSA, 2022[28]).
Leasing finance offers two main advantages compared to loans. First, a company applying for leasing finance does not need to provide collateral or a credit history, as legal ownership of the leased assets remains with the lessor. Second, the time between application and approval is typically shorter than for a loan. Leasing companies may request deposits.
Factoring
Factoring is a contractual agreement in which the factoring company takes responsibility for collecting the debts of another company. In Tunisia, factoring companies also provide other services, such as consulting, protection from non-payments of invoices, and debt recovery litigation (World Bank, 2009[29]). Two factoring companies currently operate in Tunisia, one of which has the country’s largest banks as shareholders (CBF, 2023[30]).
2.2.3. Other participants in the retail banking sector
La Poste Tunisienne
Since 1999, the state‑owned postal operator has provided a range of financial services, such as current accounts, savings accounts, insurance products and payment services. La Poste plays an important role in the country’s financial inclusion strategy and is its largest provider of current accounts. Based on the OECD’s consumer survey, around 10% of Tunisians have a current account at La Poste, around 29% have a current account with a bank, and around 64% do not have a current account.7
La Poste’s customers typically have lower incomes than banks’ customers, and its fees are typically lower than those charged by banks (Altai Consulting, 2018[31]). Young people often open current accounts at La Poste (for example, to make payments for school or university), but when they need access to credit (for example, to buy a property) they switch to a bank. Retirees are also more likely to use postal current accounts. La Poste does not provide lending products as it does not hold a banking licence and is not supervised by the BCT. Chapter 4 and Box 4.1 provide details on the role of La Poste in Tunisia’s current account market.
The SOTUGAR
The SOTUGAR is a partial credit guarantee scheme established in 2003 to provide collateral to entrepreneurs and SMEs applying for bank loans. It is jointly owned by Tunisian banks that sit on its board and by the state. When a bank receives a credit application, it may contact the SOTUGAR to ask for a partial guarantee of up to 75% of the loan. If the guarantee is granted and the loan is not repaid, the SOTUGAR immediately pays 55% of the unpaid loan and the remainder at the end of legal proceedings, which can be very lengthy (on average 6‑7 years). The cost of the guarantee – 2.6% of the loan value – is paid up front by the borrower. During interviews with the OECD, the SOTUGAR said the guarantee has little impact on interest rates paid by borrowers.
Caisse des Dépôts et Consignations
The Caisse des Dépôts et Consignations (CDC), was established in 2011 by Decree‑Law No. 2011‑85. Its objectives are to fund large infrastructure projects and to provide finance to SMEs. In 2021, the outstanding credit lines and loans were around TND 110 million (Caisse des Depots et Consignations, 2022[32]).
Public credit information registries
The BCT manages four registries providing information on the credit histories of individuals and businesses. The objectives of the registries are to provide information on the overall indebtedness of economic players and monitor the performance of loans granted, to assist in credit risk management, and to supervise financial stability. The data is collected from banks, debt collection companies, and other financial institutions.
Data collected by the BCT is organised in four registries:
the Centrale des Risques, or Risk Centre, which lists outstanding loans to SMEs and self-employed individuals
the Centrale des Credit aux Particuliers, or Individual Credit Centre, which lists outstanding loans to individuals
the Central des Chèques Impayés, or Unpaid Cheques Centre, which lists defaulted cheque payments
the Central des Bilans, or Balance Sheet Centre, which lists information from enterprises’ balance sheets and income statements, financial indicators, and comparisons with other enterprises in the same sector.8
Microfinance institutions
Microfinance is outside of the scope of this review, as stakeholders did not identify preliminary concerns in this market. Microfinance institutions are regulated by the Autorité de Contrôle de la Microfinance (ACM), or Microfinance Supervisory Authority, rather than by the BCT.
For many consumers and small businesses, microfinance loans may be an alternative to bank finance. Microfinance loans in Tunisia cannot exceed TND 40 000 in value and are typically aimed at retail customers, professionals or micro‑enterprises that may lack a credit history or collateral (ACM, 2023[33]). Microfinance loans and microfinance institutions are not subject to the cap on lending interest rates applied to bank loans, leasing and factoring products (see Section 5.3.1 for a discussion of the cap and its potential impact on the lending market).
Interest rates on microfinance products are typically significantly higher than rates on bank loans. In 2021 the taux effectif global, or global effective rate, on products offered by microfinance institutions was 31.8% [see Autorité de Contrôle de la Microfinance (2021[34]), Section 2.10], far above the rate of 9‑13% for loan products from banks and leasing companies (see Table 5.2). Eight microfinance institutions operate in Tunisia, some of which count banks among their shareholders.
2.3. Institutional overview
2.3.1. Main institutions
The main institutions responsible for regulating and supervising Tunisia’s banking sector are the BCT and the Ministry of Finance. This section also briefly presents the banking association. Annex B includes a brief overview of the country’s banking regulatory framework.
The Banque Centrale de Tunisie
The BCT was established by Law No. 1958‑90 and started operating in November 1958. During the past 30 years, the BCT’s role and functions have undergone various reforms.9 The last major reform occurred in 2016 with the adoption of Law No. 2016‑35, which recognised the BCT’s independence and financial autonomy. The BCT’s capital is held entirely by the state and is subject to parliamentary supervision.10 Its key mission is to ensure price stability and to support the government’s economic policy objectives. To pursue this mission, the BCT is responsible for a wide range of policy areas, formulating designing and implementing monetary policy, ensuring the stability, efficiency and security of payment systems, supervising banks and financial institutions and regulating banking activities, and protecting users of banking services.11 It also acts in an advisory role to the government and interacts with other public stakeholders on financial matters.12 Its governor, vice‑governor and board of directors are responsible for its management. For the purposes of this report, the BCT’s banking supervision department and the department for the development and surveillance of payment systems are of particular relevance (see organigram of the BCT (BCT, 2023[35])).
Article 26 of Law No. 2016‑48 established a Commission d’Agréments, or Licensing Commission at the BCT. The commission is chaired by the BCT governor (or her/his representative) and comprises four independent members appointed by the BCT’s board.13
Box 2.2. The Central Bank's policy for a healthy banking market
I. Legal mandate
The Central Bank of Tunisia (BCT) has a mandate to work to protect users of banking services (Article 8 of Law No. 16-35). The BCT supervises authorised banks and financial institutions and works to ensure that they carry out their activities in accordance with its provisions and implementing regulations in order to preserve their financial soundness and protect their depositors and the users of their services (Article 63 of Act No. 2016-48).
II. Operational tools
The BCT monitors market practices with a view to protecting users against unhealthy practices, in particular through :
monitoring the legality of new banking products marketed ;
monitoring banking practices through customer reports and on-site inspections;
price monitoring;
monitoring the advertising of banking products and practices;
monitoring customer information, in particular through standard contracts;
monitoring the complaints handling system set up by banks and financial institutions.
III. Recent regulatory and operational developments
Circular no. 2021-05 on the governance framework for banks and financial institutions required banks' management bodies to devise a user protection policy guaranteeing the principles of listening to customers, keeping them well informed and conducting business in their best interests.
This circular paved the way for a framework for the BCT's intervention policies, including in disciplinary matters. Circular no. 2022-08 on the handling of complaints by banks has standardised the way in which customer complaints are dealt with, making it easier for customers to access an after-sales service within a short timeframe and standardising the way in which complaints are dealt with.
BCT is currently working on a circular to be published shortly on commercial and pricing practices with the aim of:
Guaranteeing commercial conduct in the interests of customers.
Guaranteeing that customers are fully and clearly informed at all stages of the marketing process.
Providing justification to the BCT for any tariff revisions and set up a database of tariffs and financial products for monitoring purposes.
The BCT is currently working with the Ministry of Finance on a draft decree-law setting out a series of obligations to be imposed on banks with regard to the management of inactive accounts.
BCT has taken the preliminary steps to become a member of OECD’s FinConet (the International Financial Consumer Protection Organisation).
Source: Central Bank of Tunisia, 2023
In addition, in 2016, by extending the prerogatives of the Observatoire des Services Bancaires, or Banking Services Observatory, the Observatoire de l’Inclusion Financière (OIF), or Financial Inclusion Observatory, was established within the BCT to gather information relating to the usage and quality of financial services and to improve access to these services.14 Among its tasks, the OIF is responsible for establishing indicators to measure the cost of financial services, customer satisfaction and financial inclusion, issuing recommendations to market players, preparing annual reports on banking mediation, and carrying out studies on the sector.
The Ministry of Finance
The Ministry of Finance plays an important policy and regulatory role in Tunisia’s banking sector. Within the ministry, two departments are relevant to this report: the Direction Générale du Financement, or Directorate General of Financing, and the Direction Générale des Participations, or Directorate General of State Participations. The Direction Générale du Financement issues opinions and contributes to legislation on all legal, technical and economic issues relating to banks and credit institutions, interacting with the BCT and banking associations, and it participates in the formulation and execution of monetary and credit policy, support for SMEs, investment promotion and supervision of the Autorité de Contrôle de la Microfinance (Ministère des Finances, 2023[36]). The Direction Générale des Participations exercises the state’s ownership rights in state‑owned banks, other banks and financial institutions in which the state holds minority stakes, and it supervises the management of state‑owned banks (Ministère des Finances, 2023[37]).
The Conseil de la Concurrence
The Conseil de la Concurrence, or Competition Council, was established in 1991 as a special commission to hear applications relating to anti-competitive practices and provide opinions on competition-related draft legislation or regulation. The commission became the council in 1995 [see OECD (2022[38]) for more details on its history, composition and operations; Section 3.6 discusses the council’s role in financial services].
The banking association: Conseil Bancaire et Financier
Banks and other financial institutions established the Association Professionnelle Tunisienne des Banques et des Etablissements Financiers, or Tunisian Professional Association of Banks and Financial Institutions, in 1972. It was renamed the Conseil Bancaire et Financier (CBF), or Banking and Finance Council, in May 2022. The role of the CBF is discussed in Section 3.4.
References
[33] ACM (2023), Authorité de Contrôle de la Microfinance: La microfinance en Tunisie, http://www.acm.gov.tn/Fr/la-microfinance-en-tunisie_11_23 (accessed on 13 June 2023).
[31] Altai Consulting (2018), Mesurer línclusion financiere en Tunisie.
[34] Autorité de Contrôle de la Microfinance (2021), Rapport de revison des comptes.
[22] Bank of England (2022), What is Islamic finance?, https://www.bankofengland.co.uk/explainers/what-is-islamic-finance (accessed on 19 May 2023).
[17] Banque Central de Tunisie (2022), Rapport Annuel sur la Supervision Bancaire - Exercice 2020.
[18] Banque Central de Tunisie (2022), Rapport Annuel sur la Supervision Bancaire - Exercice 2021.
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[3] Banque Centrale de Tunisie (2022), Rapport Annuel 2021.
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Notes
← 1. Law No. 2016‑48, Art. 188 : Les banques et les établissements financiers non-résidents ayant leur siège social à l’étranger.
← 2. Information based on (Banque Centrale de Tunisie, 2022[3]) and updated after the Banque Franco-Tunisienne was declared bankrupt In March 2022.
← 3. Law No. 89‑9, Article 8. – (nouveau) (Law No. 96‑74): The following shall be deemed to be State-owned enterprises within the meaning of this law
non-administrative public establishments, the list of which is set by decree.
companies whose capital is wholly owned by the State.
companies whose capital is held by the State, local authorities, public establishments and companies in which the State holds more than 50% of the capital, either individually or jointly.
Public shareholdings are those held by the State, local authorities, public bodies and companies whose capital is wholly owned by the State.
← 4. Two state‑owned banks specialise in microfinance and SME financing: the BTS and the BFPME. More details on these two banks will be provided later in the report.
← 5. The 12 listed banks are all domestic. Four are state‑owned, seven are private commercial banks, and one is Islamic.
← 6. Meeting with BFPME.
← 7. Around 2% of individuals have an account both at La Poste and at a bank.
← 8. Response of the BCT to information request and Service de consultation à distance, https://online.bct.gov.tn/scd/.
← 9. In 1988 (Law No. 1988‑119), 1994 (Law No. 1994‑25), 2000 (Law No. 2000‑37), 2006 (Law No. 2006‑26), 2007 (Law No. 2007‑69) and in 2016 (Law No. 2016‑35).
← 10. See Articles 2 and 5 of Law No. 2016‑35.
← 11. See Articles 7‑8 of Law No. 2016‑35.
← 12. See Article 29 to 32 of Law No. 2016‑35.
← 13. See Décision de la commission d’agréments No. 2017‑1, fixant règlement intérieur de la commission d’agréments ; and Décision de la commission d’agrément No. 2017‑04, relative aux procédures de dépôt des demandes d’agrément.
← 14. See Article 94 of Law No. 2016‑35.