Firm’s financing: the distribution of credit

1.4. Firm’s financing: the distribution of credit.

27. Even though credit to the private sector is on average higher in Tunisia than it is in the Middle East and North Africa region as a whole, it remains much lower than in other areas, such as the advanced economies from OECD. It has remained stable, at roughly 64-66 percent of GDP since the mid-1990s, despite the implementation by the Tunisian government of various mechanisms aimed at promoting financing of this sector (Chart 5). In addition, it must be noted that since 2007, this indicator is higher in Morocco than in Tunisia, it is respectively at 79.5 and 66.6 percent in 2008.

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  Recent growth in outstanding credit is mainly a result of an increase in consumer credit. Though the lion’s share of outstanding credit (almost 78 percent in 2008) goes to productive sectors, outstanding consumer credit nevertheless increased more sharply than business credit. Outstanding consumer loans thus rose by an average of 19.1 percent²² between 2005 and 2008, while loans to the productive sector only climbed by an average of 7.6 percent (Chart 6);
  
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  Most of the credit to the productive sectors goes to the services sector (57.5 percent of outstanding credit in 2008) then to industry (roughly 37.5 percent of outstanding credit in 2008, Chart 7). Within services, the main recipients are trade, hotels and restaurants; in industry, the main beneficiaries are the agro industry and construction industries (Chart 8 and Chart 9);
  
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  Most of the credit to productive sectors goes to the private sector (about 92-93 percent in industry and services in 2008);
  
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  Most of the credit to industry is short-term (about 65.9 percent in industry in 2008) whereas in services, there is an almost equal balance between short and medium/Long term credit (Chart 10 and Chart A. 4);
  

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  It is not easy to estimate the amount of financing granted to SMEs because there are no official statistical series in this area and definitions of this category have varied over time. It has generally been accepted in recent years that SME financing amounts to roughly 5 percent of credit granted to the productive sectors. In addition, SMEs’ share in banks’ portfolios tend to remains small: fewer than 4,000 customers for the country’s foremost public bank and fewer than 1,500 customers for the second (FSAP update 2007).
  

Chart 5. Credit to the Private Sector (Pct. of GDP).	Chart 6. Yearly growth rate of credit by beneficiary type (Pct).
Chart 7. Structure of credit to businesses (Pct.)	Chart 8. Credit to services in 2008 (Pct).
Chart 9. Credit to industry in 2008 (Pct). Source: BCT 2009.	Chart 10. Term structure of credit in 2008.