Fintech Landscape of Tunisia in 2022

In the Middle East and North Africa (MENA) region lies the country of Tunisia. How have fintech and wider digital spaces been in 2022?

With regard to its economic development, as highlighted by Fintech Times‘ Fintech: Middle East and Africa 2021 the report the country is relatively stable compared to its neighbors.

Despite having its own challenges before and during Covid-19, from economic to political to security, the country continues to move economically forward.

Tech has given the North African nation a lifeline away from an economy that is completely dependent on tourism; a dependence that was especially pronounced during the forced isolation of the pandemic.

The government has been proactive in developing a broader start-up and digital infrastructure where entrepreneurship can take shape. This has included one Digital Tunisia 2020 strategy that has prioritized digital transformation as a key driver for the country’s economic development.

One of the implementation methods for this has included being the first African country to pass one The Start-up Act in April 2018. The law provides the following:

• Legal framework to simplify the start-up process
• Create a fund of 200 million euros to be allocated to specific verticals
• A strategy to consolidate the ecosystem and hubs of Tunisia

As of August 2020, 327 start-up companies have received the start-up label, which gives them access to the benefits of the law.

Another more fintech-related has been Central Bank of Tunisia (or Central Bank of Tunisia – BCT) in 2020 announces the launch of the regulatory sandbox. It has also established a fintech committee, a technology hub, a TCB lab – to name a few.

From Global Institute for Entrepreneurship and Development (GEDI), which measures the dynamics of the entrepreneurship ecosystem, back in 2019, Tunisia ranked first in Africa, sixth in the MENA region and 40th globally. This has been attributed to the government’s efforts, as previously mentioned, to help promote entrepreneurship combined with the ecosystem and drive to do so.

As emphasized by Africa: The Big Deal According to the report, Tunisia has made significant gains in start-up investment as a whole. While in 2019 it only had 7 million dollars, this grew to 14 million dollars in 2020, 23 million dollars last year and already 104 million dollars this year until May.

According to a study on Tunisia’s fintech ecosystem, the country hopes to become a pioneer by implanting the TCB blockchain, digital payments and cryptocurrencies – according to statements by the governor of TCB.

Much will be looked at whether this can happen, but the ambitions are there. In addition, the Tunisian market emphasizes in the same source that the market is too tightly regulated, which may deter new start-ups and other innovations from thriving.

In 2019, less than 40 percent of Tunisians aged 15 and over had a bank account, which was lower than the average of less than 50 percent in MENA. In addition, eight percent of the population had a credit card, which is lower than the average in the Middle East and Africa (MEA) of 12 percent.

An interesting fact is the popularity of the postal service in Tunisia, which is not a bank or microcredit company, but which still had over six million people with financial accounts there.

Of the Tunisians who are part of a formal financial service, at some point 90 per cent are with them The Tunisian Post Office system; It offers a wide range of fintech products such as mobile financial services, national and international transfers, bill payments and smart card purchases.

According to Hootsuite, of the more than 11 million people in Tunisia, mobile connections were over 150 percent of the population of 17.84 million. In addition, two thirds (or 66.7 percent) of the population use the Internet. Moreover, with its numbers for the internet higher than MEAs, it is worth nothing it also has a smartphone penetration of 66 percent.

Despite the numbers, Tunisia, like many of its neighbors, continues to be primarily a cash-based society. Mobile money, for example, has only two percent penetration in the country. It will present challenges where the use of technology such as fintech will contribute to changing society.

Nevertheless, like the rest of the world, the pandemic has forced many to go digital, especially with the rise of e-commerce. In Tunisia, this saw an increase in electronic payment transactions recorded during the second quarter of 2020 (during the general and targeted lock-in periods), where there was a 34 percent increase in the number of transactions and a nine percent increase in the value of such transactions.

For fintech to also grow further partnerships between banks, insurance and telecommunications and fintech in the country, it should accelerate. However, this seems to be happening slowly.

For example, Arab Tunisian Bank (ATB)a medium-sized universal bank that serves retailers, SMEs and corporate customers, and which has its parent company Arab Bank Grouphas gone live with Temenos the core banking system this year.

The project started only in 2019 with ATB signing for a wide range of front-to-back office solutions from the banking technology supplier, and later this year will be phased into this launch.

Finally, since the country is not only a francophone, but an Arab country and also African, it can play a unique role in the present and further be a bridge between all three cultural and business aspects.

Despite efforts to build the fintech ecosystem in Tunisia, much remains to be done. Nevertheless, the ambition to mature that landscape is definitely there.