The 8th Episode of CJD Talks 2024: Adapting to the New Check Regulation in Tunisia
Expert Insights from MBM Group's General Director, Selim Ben Messaoud
The 8th episode of CJD Talks 2024 welcomed Mr. Selim Ben Messaoud, General Director of MBM Group, to discuss the implications of the new check regulation in Tunisia. As the country faces financial challenges and economic risks, Mr. Ben Messaoud shared his expertise on the history and importance of check culture in Tunisia.
A Check Culture as a Solution to Financing Needs
According to Mr. Ben Messaoud, Tunisians have widely adopted the use of checks due to high bank credit rates and inaccessible guarantees for SMEs. In this context, checks have represented a practical solution for securing transactions without resorting to costly loans. "For many merchants, issuing post-dated checks has become an effective way to guarantee payment to their suppliers without the constraints of high bank interest rates," he explained.
Bounced Checks: A National Problem
In Tunisia, the use of checks goes beyond mere commercial transactions; it is also perceived as a guarantee due to the penal sanctions in case of non-payment. However, the growing number of bounced checks reveals an alarming reality, exacerbated by the lack of a reliable national database allowing merchants to verify their clients' solvency. According to Mr. Ben Messaoud, "without a business rating system, it is difficult to know with certainty whether a client is financially reliable."
An Opportunity for Financial Institutions
Mr. Ben Messaoud believes that the new regulations open a window of opportunity for banks and other financial institutions. "Banks and payment institutions could offer adapted solutions to support merchants and entrepreneurs facing these changes," he suggested. The new regulation, which stipulates that bounced checks of 5,000 dinars or less are no longer punishable by law, raises concerns, especially in an economy where checks are a widely adopted payment instrument.
A Seismic Shift for Certain Economic Sectors
The new regulation will significantly impact sectors such as technology, electrical appliances, and tourism, where check transactions are prevalent. "Travel agencies, for example, which rely on checks for their bookings, will have to readapt their practices," he noted, highlighting that this transition could weigh on the growth of these sectors and lead to increased unemployment.
Winners and Losers in the New System
In a changing economic climate, Mr. Ben Messaoud identifies well-organized companies with established trust relationships with their partners as the winners of this transition. "Companies with a positive history with their clients and suppliers will gradually shift from checks to drafts, while new entrepreneurs may face more difficulties in adapting," he analyzed. New entrepreneurs without an established trust record may be disadvantaged, reducing competition for more experienced companies.
Towards a Recession and the Need for Awareness
According to Mr. Ben Messaoud, this legal reform could lead to an economic recession in Tunisia, reducing monetary circulation and limiting business stocks. "By reducing stocks, companies risk provoking shortages, which could lead to inflation," he warned. In this context, he urges business leaders to inform their clients and partners about these new challenges and advocates for more flexible banking offers. His advice to entrepreneurs is to structure their businesses and improve their reliability image to inspire confidence among their partners.
A Call to Innovation and Government Support
To conclude, Mr. Ben Messaoud emphasized the crucial role of the state and banks in accompanying this transition. He invites financial institutions to offer low-interest credit lines and support entrepreneurs during this adaptation phase. "Tunisia has adapted before, and it can do so again," he concluded.
In summary, this new regulation requires a overhaul of financial practices in Tunisia. To succeed, it will be essential to restructure economic habits, diversify payment solutions, and strengthen mutual trust between merchants, entrepreneurs, and financial institutions.
