Tunisian Economy at Risk of "Cashification"
The Confederation of Tunisian Citizen Enterprises (CONECT) Warns of a Growing "Cashification" of the Tunisian Economy
The Confederation of Tunisian Citizen Enterprises (CONECT) has sounded the alarm on a growing "cashification" of the Tunisian economy, citing the simultaneous implementation of several reforms in a context of high tensions resulting from state financing and an increased preference for cash, which has had a negative impact on small and medium-sized enterprises (SMEs) access to financing.
In a note of orientation titled "Tunisian SMEs: Trapped by Cash, How the Cashification of the Economy is Suffocating the Productive Fabric," economist Mehdi Bhouri highlights that SMEs are facing a "quintuple straitjacket" characterized by:
- Credit rationing: The scarcity of bank credit
- Cash payments: The increasing use of cash transactions
- Commercial credit contraction: The decline in inter-enterprise commercial credit following the reform of checks
- Widening tax base: The expansion of the tax base
- Shift towards state financing: The increased focus of banks on financing the state
The document notes that bank credits to the economy have only grown by 2.8% in 2025, a level below inflation, while credits to the state have increased by 21.5%, exacerbating an exclusion effect against enterprise financing.
Accelerating Cash Circulation Outside the Banking System
CONECT points to an acceleration of cash circulation outside the banking system, with a cash-to-money ratio reaching a historically high level of 18.3%, illustrating a significant increase in the use of cash.
A "Double Engine" Scenario in 2026
The note warns of a "double engine" scenario in 2026, combining a rebound in inflation and a continued increase in cash, which could lead to a contraction of credit to the economy and a deterioration of SME financing conditions.
Recommendations to Support SME Financing
To mitigate these risks, CONECT proposes several immediate measures, including:
- State-guaranteed factoring: Implementing a factoring system guaranteed by the state to support SME financing
- Progressive payment tracking thresholds: Establishing progressive thresholds for payment tracking, balancing transaction simplification and financial inclusion
- Incentives for digital payments: Encouraging digital payments through a reduction in VAT on electronic transactions, lower bank commissions on electronic payments, and subsidies for the acquisition of electronic payment terminals (EPTs) for SMEs
- Structural reforms: Reinforcing the deposit guarantee fund, diversifying sovereign financing sources to alleviate pressure on local banks, and improving fiscal predictability to limit hoarding and informal sector flows
CONECT has called for the organization of a national roundtable on SME financing, bringing together the Central Bank, banks, business organizations, and the Ministry of Finance to develop a coordinated action plan for SME financing. Additionally, the organization has suggested that the Central Bank produce an analytical report on the impact of check reform on inter-enterprise commercial credit and establish a permanent SME financing observatory, involving the banking sector and business organizations.
