Tunisia : The Tunisian-Kuwaiti Bank receives a €20 million line of credit
This envelope will help Proparco diversify its funding sources.Proparco, a subsidiary of the French Development Agency dedicated to the private sector, announced last week it had given to the Tunisian-Kuwaiti Bank (BTK) a €20 million line of credit to support the development of this Tunisian subsidiary of the French banking group Banque Populaire Caisse d'Epargne (BCPE).
The line of credit will help diversify BTK's sources of funding and support its investments in new or fast growing micro, small and medium-sized enterprises (MSMEs).
Despite ongoing reforms, the Tunisian banking sector suffers from deficiencies in the quality of credit, risk monitoring and governance, according to a study led by the Arab Institute for entrepreneurs.
The study said that Tunisian banks are experiencing a liquidity deficit, with a small banking sector whose assets are estimated at 115 per cent of GDP. "The bond market remains underdeveloped, with a very limited role in financing the economy," the report adds.
According to the Institute, ending the banks' liquidity deficit will depend on several structural factors: foreign reserve level, public confidence in the banking system, economic growth and the development of means of payment.
In addition, issues of legal and institutional nature impede the financing of small and medium-sized enterprises, the study notes. These include the current law on collective procedures, the absence of binding regulations on banking "risk management" and the lack of an effective system for sharing information on the risk of credit.