Summary:

Fitch Ratings released a report highlighting the challenging domestic market faced by non-bank financial institutions (NBFI). NBFIs are financial institution that do not have a full banking license and cannot accept deposits from the public, but do offer alternative financial services that can be essential to an economy. NBFIs can include insurance providers, venture capital firms, and microloan organizations. The Fitch report highlights dependence on the domestic banking market for funding as one of the challenges and noted that those NBFIs owned by local banks potentially face fewer challenges.

Outlook:  

Without progress in the NBFI sector, Tunisia will continue to face a limited economic outlook. Reform in the financial sector remains contentious as established banking institutions and the financial policy community are resistant to change. The introduction of digital payment providers or non-traditional lenders has yet to gain meaningful traction or adoption despite the potential to facilitate entrepreneurship and broader economic growth.