Tunisia’s public banks face $2.3B in unpaid loans

Non-performing loans at Tunisia’s public banks have risen to 6.87 billion dinars (approximately $2.32 billion), reflecting the severity of the country’s ongoing financial crisis, as reported by the Arab Weekly plus agencies on June 25th.

This growing burden is spread across key state-owned institutions, including the Société Tunisienne de Banque (STB), BH Bank, and the National Agricultural Bank (BNA), according to Tunisia’s official press agency, TAP.

The scale of these toxic assets reveals deep structural problems within the governance of the public banking sector. Economic stagnation, combined with a challenging business climate, has put increased strain on borrowers and weakened their capacity to repay loans, further undermining the health of the financial system.

Tunisia’s recent efforts to increase direct foreign investment and development plans are a start; however, the surge in bad debt coincides with broader political efforts to recover public funds. The current total of non-performing loans is roughly equal to half of the sum the government aims to reclaim through criminal settlements with business figures accused of corruption.

President Kais Saied has made the recovery of these assets a core focus since consolidating power in 2021, repeatedly asserting that an estimated $4.8 billion had been misappropriated by individuals who enriched themselves at the expense of the public.

With public banks under strain and governance issues unresolved, the country’s financial institutions face serious challenges that require urgent and systemic intervention. The rising volume of bad loans also casts doubt on the state’s ability to stabilise the sector without broader economic reform and meaningful improvements in institutional oversight.

Arab Weekly plus agencies, Middle East Eye