Country Profile

Image: Sidi Bou Bou. Source: grolli77

As of 2012, Tunisia had a population of 10.89 million people, with an urban population of 66 percent.[1] The housing finance system is well established and has matured further than most other countries in the Middle East and North Africa.[2]  Although the commercial mortgage rates are modest at approximately seven percent the cost of housing is still too high for many families to meet the lending standards, so commercial mortgage lending is confined to upper middle and higher income households. The Government Housing Bank oversees subsidized lending programs with lower interest rates between 3.5 percent to 5.75 percent in order to provide credit access to lower income families. [3] Most new formal housing is built incrementally.  The Center for African Housing Finance found that 40 percent of new housing each year is built informally.[4] Formally, Tunisia has a 78 percent homeowner ship rate.[5] 
After Tunisia gained independence in 1956, the country nationalized several economic sectors that had previously been run by the French. Through this nationalization, Tunisia set up a strong public sector to spur economic development. Since 1960 Tunisia focused on creating a strong social housing program which was originally primarily funded through public subsidies. Subsidized housing mostly benefited public servants and was insufficient to deal with the growing housing needs. The 1970s saw a rise in informal settlements in and around the major urban areas which the government aimed to eradicate and replace with formal public housing settlements. It became clear that other approaches were needed to deal with informal settlements and poverty issues. In 1974 the National Housing and Savings Fund (CNEL) was created to work alongside other public institutions to create economic development opportunities and provide public infrastructure and sanitation to the growing urban areas throughout Tunisia.  

In 1989 the CNEL was restructured into the Housing Bank which is currently in charge of managing the government housing loan programs. [6] The Housing Bank is fully backed by the state, with the primary responsibility of providing loans for residential home purchases, home improvements, and land acquisitions. The Housing Bank is currently responsible for 20 percent of all mortgage lending in Tunisia.  The Housing Bank’s main program is the Housing Promotion Fund for Salaried Persons (FOPROLOS), which was created in 1977, and is the largest of the subsidized housing programs. FORPROLOS has a three tiered loan option structure, which matches lending rates and requirements to household income. This structure is designed to provide loans for residents earning as little as one to two times the minimum wage. [7]Other programs exists to subsidize home improvements and to achieve decent living standards for the poorest populations through personal construction loans for the poorer populations in Tunisia. 

There are also twenty non-government retail banks that distribute housing loans, primarily to higher income families due to strict income requirements. [8] The funding base for mortgages is mostly deposits through both the Housing Bank and private commercial banks. The Housing Bank can also issue bonds in the capital markets; however, a large source of funding for the subsidized sector originates directly from the government budget. [9] 

[1] WDI, 2012 [2] Hassler, Olivier. Housing and Real Estate Finance in Middle East and North Africa Countries, 2011 [3] Centre for Affordable Housing Finance in Africa, Housing Finance in Africa Yearbook,  2013 [4] Centre for Affordable Housing Finance in Africa, Housing Finance in Africa Yearbook 2013 [5]  Hassler, Olivier. Housing and Real Estate Finance in Middle East and North Africa Countries, 2011 [6] UNHABITAT, Tunisia Housing Profile, 2011 [7] Centre for Affordable Housing Finance in Africa, Housing Finance in Africa Yearbook,  2013 [8] UNHABITAT, Tunisia Housing Profile, 2011 [9] Centre for Affordable Housing Finance in Africa, Housing Finance in Africa Yearbook 2013