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Tunisia: Fitch expects challenging operating environment for NBFIs

Fitch Ratings said in a new report it expects Tunisian non-bank financial institutions’ (NBFIs) profitability, asset quality and liquidity profiles will remain pressured by the challenging domestic operating environment.

“While all NBFIs are affected, factoring and microfinance companies’ shorter-dated balance sheets and higher margins mean that they are incrementally better-placed to withstand operating environment pressures than domestic leasing companies,” it added.

The ratings agency noted that Tunisian NBFIs rely on local bank funding, which heightens their sensitivity to potential decreasing liquidity in the banking sector.

“An agreement with the IMF should unlock additional funding but the contingent fiscal reforms could worsen the economic challenges. Local bond funding diversifies funding for many issuers,” it pointed out.

Fitch also said Tunisian NBFIs’ National Ratings range from ‘B+(tun)’ to ‘A-(tun)’ and are on Stable Outlooks, reflecting its view that the relative creditworthiness on the National scale will remain unchanged.

National Ratings of bank-owned NBFIs tend to be higher than peers, it added, as it expects extraordinary support if required and due to associated funding benefits from having bank shareholders.


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