Technology has enabled Tunisia to free itself from an economy that is completely dependent on tourism, an addiction that was particularly intensified during the Coronavirus pandemic.
The government has been proactive in developing a broader digital and start-up infrastructure where entrepreneurship can take shape. In particular, he developed the Digital Tunisia 2020 strategy, which makes digital transformation a significant driver of the country’s economic development, emphasizes the world leader in the fintech press “The Fintech Times”.
One of the methods of implementing this strategy was to be the first African country to adopt a start-up law in April 2018. A law that provides a legal framework to simplify the process of launching start-ups, the creation of a fund of funds of 200 million euros, which will be allocated to specific verticals and a strategy to consolidate the ecosystem and hubs of Tunisia. In addition, since August 2020, 327 startups have received the startup label, which gives them access to the benefits of the law.
The Central Bank of Tunisia, for its part, announced in 2020 the launch of the regulatory sandbox. It has also set up a fintech committee, a technology hub, a TCB Lab, to name a few.
According to the Global Institute for Entrepreneurship and Development (GEDI), which measures the dynamics of the entrepreneurial ecosystem, in 2019 Tunisia was ranked first in Africa, sixth in the MENA region and 40th globally. It was to reward the government’s efforts aimed at helping to promote entrepreneurship combined with the ecosystem and the will to do so.
As the Africa: The Big Deal report highlights, Tunisia has made remarkable investment gains when it comes to startups as a whole. While in 2019 it only had $ 7 million, that number rose to $ 14 million in 2020, $ 23 million last year and already $ 104 million this year to May.
According to a study of Tunisia’s fintech ecosystem, the country hopes to become a pioneer by implementing blockchain in its central bank, digital payments and cryptocurrencies.
A highly regulated market
Whether that can happen remains to be seen, but the ambitions are there, the Fintech Times states. The Tunisian market is too tightly regulated, which may deter other startups and innovations from thriving.
In 2019, less than 40% of Tunisians aged 15 and over had a bank account, which was below the average of less than 50% in the MENA region. Similarly, eight percent of Tunisia’s population had a credit card, which is below the average in the Middle East and North Africa of 12 percent.
An interesting fact is the popularity of the postal service in Tunisia, which is neither a bank nor a microcredit company, yet has more than six million people with a financial account.
Among Tunisians who are part of a formal financial service, 90% use the La Poste Tunisiene system, which offers a wide range of fintech products such as mobile financial services, domestic and international money transfers, bill payments and smart card purchases.
According to Hootsuite, of Tunisia’s more than 11 million people, mobile connections accounted for more than 150% of the country’s population, or 17.84 million. In addition, two thirds (66.7%) of the population are Internet users. In addition, with internet numbers that are higher than AME numbers, it is important to note that the smartphone penetration rate is also 66%.
The dominion of cash
Despite these figures, Tunisia, like most of its neighbors, remains a cash-based society. Mobile money, for example, has a penetration of only two percent in the country. The adoption of a technology such as fintech would allow society to evolve.
Nevertheless, as in the rest of the world, the pandemic has forced many people to go digital, especially with the advent of e-commerce. In Tunisia, there was an increase in registered electronic payment transactions in the second quarter of 2020 (during the general and targeted lockdown periods), with a growth of 34% in the number of transactions and a 9% increase in the number of transactions. of these transactions.
For fintech to grow as well, partnerships between the country’s banks, insurance companies, telecommunications and fintech must accelerate. However, it seems to be happening slowly.
For example, The Fintech Times cites the Arab Tunisian Bank (ATB), a medium-sized universal bank serving individuals, SMEs and companies whose parent company is the Arab Bank Group, which implemented the Temeno Central Bank system this year.
The project started in 2019 with ATB signing a contract for a wide range of front-end and back-end solutions with the banking technology supplier before it is phased out this year.
Finally, as the country is not only a French-speaking country, but also an Arab and African country, it can play a unique role in the present and, moreover, be a bridge between the three cultural and commercial aspects.
Despite efforts to build the fintech ecosystem in Tunisia, much remains to be done. Nevertheless, the ambition to mature this landscape is there, The Fintech Times concludes.