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More flexibility in companies’ access to external financing

The Central Bank of Tunisia (BCT) has just published circular No. 2020-13 on “the revision of the regulatory conditions of access of resident companies to sources of external financing towards greater flexibility and to enable them to replenish their treasuries in foreign currency or dinar”.

The BCT said in a press release issued Thursday that these measures are mainly articulated around the three main axes.

The first is “raising the ceilings of credits that can be freely obtained, which is likely to strengthen the negotiating power of resident companies in this area and enable them to seize the opportunities that arise.

Secondly, affirming the freedom to conclude credit agreements for companies guaranteed by the Tunisian State.

Thirdly, allowing the introduction of rating organizations specializing in the rating of microfinance companies, thereby improving the latter’s access to external foreign currency resources, given their increasingly important role in the mobilization and diversification of resources to finance economic activity in Tunisia.

The rating agencies specializing in the rating of micro-finance companies provided for in that circular are: MicroRate; Micro-Credit Ratings International Limited (M-Cril); and Micro Finanza Rating (MFR).

With regard to raising the ceilings for loans that can be freely contracted, the circular provides for a number of measures:

1- For loans repayable within one year:

From 10 MD to 25 MD per calendar year for banks and approved financial institutions within the framework of law No. 2016-48 of July 11, 2016;

From 3 MD to 10 MD per calendar year for other companies, including micro-finance companies, approved within the framework of the decree-law No. 2011-117 of November 5, 2011.

2- For loans repayable over a period exceeding one year:

from 10 MD to 50 MD per calendar year, for companies, including the above-mentioned microfinance companies, listed on the stock exchange or having obtained a rating from one of the rating organizations appearing on the list attached to the circular;

–  From 3 MD to 30 MD per calendar year, for companies, including the above-mentioned microfinance companies, not listed on the stock exchange and not having obtained a rating from one of the rating organizations appearing on the abovementioned list;

At the same time, it should be noted that banks and financial institutions, listed on the stock exchange or having obtained a rating from one of the rating organizations appearing on that list, continue to benefit from the removal of the ceiling on loans contracted.

It should be recalled that the access of resident companies to foreign currency financing sources from non-residents has been established in 1993 with the adoption of the circular of the Central Bank of Tunisia No. 93-16 of October 7, 1993.

Since then, several revisions were introduced in order to better meet the requirements of the economic activity of those companies.

These credits can take different forms, such as buyer credits, supplier credits, financial credits, leasing credits, advances in associated current accounts, etc….

They must be accompanied by the best conditions prevailing on the market.

Repayment of the principal, payment of interest and applicable charges are freely made through the authorized intermediary domiciliary of the credit agreement.

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