Tunisia’s cheque crisis shows why it needs a real credit system

Tunisia has spent years using the criminal justice system to do the work of a modern credit market.

The clearest evidence is the cheque. For decades, the postdated cheque carried a role far beyond its legal purpose as a payment instrument. It became a substitute for consumer credit, a guarantee between traders, a financing tool for small businesses and, in many cases, the only way a household could buy a refrigerator, furniture, school equipment or medical treatment without paying everything in cash.

Its force came from fear. A person who issued a cheque without sufficient funds could face prison. In May 2024, the Tunisian government said 496 people were imprisoned for unpaid cheques, including 292 convicted prisoners and 204 people in pre trial detention. The National Association of Small and Medium Enterprises gave a far higher estimate, saying about 7,200 people were imprisoned and thousands more were being sought. Human Rights Watch documented the gap in its June 2024 report, “No Way Out: Debt Imprisonment in Tunisia.”

The prison figures matter because they point to a larger economic failure. Tunisia has treated unpaid debt as a criminal problem partly because its formal credit system does not work well enough. World Bank data shows that the share of Tunisian firms describing access to finance as a major constraint rose from 21.9 percent in 2013 to 43.9 percent in 2020. The OECD has reported that Tunisian micro, small and medium sized enterprises face average collateral requirements of almost 300 percent of loan value, among the highest in the World Bank enterprise surveys dataset.

In that kind of economy, the cheque became more than a cheque. It became a shadow credit system.

The 2024 cheque reform was necessary. Law No. 2024-41 of 2 August 2024 came into force in February 2025, with old chequebooks becoming invalid from 3 February and the launch of the TuniChèque digital platform. The law tightened cheque use, introduced new controls, reduced some penalties and created routes for mediation and regularisation.

But the reform did not abolish prison. An unpaid cheque above 5,000 dinars that is not regularised can still lead to a prison sentence of up to two years and a fine of 20 percent of the cheque’s value. That matters. Tunisia has eased the old system, but the criminal crutch remains.

The next reform should move beyond cheques. Tunisia needs a properly regulated national credit scoring system.

A credit score should not become a blacklist. It should not become a private instrument of humiliation or exclusion. Done properly, however, it could help Tunisia solve a problem that is damaging citizens, businesses and the state at the same time: the absence of a reliable, fair and transparent way to measure financial behaviour.

Today, too much of the economy runs on personal knowledge, family reputation, informal arrangements and fear of legal consequences. Traders extend credit because they know someone, trust someone, fear losing a client, or hold a cheque as leverage. Families rely on postdated cheques because credit cards remain limited and consumer finance is often expensive or difficult to access. Small businesses stretch payments because banks are cautious, collateral is hard to provide and formal lending can feel unreachable.

This system is unfair to the honest borrower who pays bills on time but has no formal record strong enough to obtain affordable credit. It is unfair to the small business that has regular cash flow but cannot prove its reliability in a way banks accept. It is unfair to the supplier who must choose between refusing credit and taking a cheque that may later become a legal dispute. It is unfair to the courts, which end up processing financial distress as criminal conduct.

A credit scoring system would not solve all of this. It would, however, create a better foundation.

The basic idea is simple. People and companies should build a financial reputation through their actual behaviour. Paying loans on time should count. Paying utility bills, rent, leasing instalments, telecom bills and supplier invoices on time could count, where the data is reliable and legally shared. Repeated defaults should also count. Settling debts should improve a record. Long periods of responsible conduct should be recognised.

This would change incentives.

A person who knows that unpaid obligations will affect future access to credit has a reason to behave responsibly without the state threatening prison. A bank that can see a fuller picture of a borrower’s history can lend with more confidence. A retailer can offer instalment payments based on risk rather than guesswork. A small business can build credibility over time instead of depending only on collateral, personal connections or a cheque book.

Tunisia already has part of the infrastructure. The Central Bank operates the Centrale des Risques, a public credit registry. But a public registry designed mainly around banking information is not enough. Tunisia needs to move toward a broader, citizen facing credit information system that works for the real economy.

That means four conditions.

First, it must include positive information, not only defaults. A system that records only failure becomes a blacklist. A useful credit score must also record good behaviour: regular repayment, settled debts, stable payment history and responsible use of credit.

Second, citizens and businesses must have the right to see their file, challenge errors and obtain corrections quickly. A credit scoring system without a correction mechanism would punish people for administrative mistakes, identity confusion or outdated information.

Third, the system must be supervised by law. The Central Bank should regulate financial reporting standards. Data protection authorities should oversee privacy, consent and misuse. No company should be allowed to collect sensitive personal information or use hidden criteria that discriminate by neighbourhood, gender, family name or social status.

Fourth, credit scoring must be linked to a humane debt settlement system. People who fall into difficulty should have routes to restructure, repay and recover. The objective should be accountability, not permanent exclusion.

This is where the cheque crisis matters most.

Tunisia’s old cheque regime turned private debt into a public criminal problem. It may have discouraged some bad faith behaviour, but it also trapped many people in impossible situations. A person in prison cannot rebuild a business, repay a supplier, support a family or return to formal economic life. A trader in hiding cannot regularise a debt. A bankrupt small business owner can be pushed out of the formal economy before creditors have any realistic chance of recovering what is owed.

A credit scoring system offers a different logic. It says that financial misconduct should have consequences, but those consequences should be economic, proportionate and reversible. Someone who repeatedly defaults should face higher borrowing costs, lower limits, stricter conditions or temporary exclusion from certain forms of credit. Someone who repays and rebuilds should regain access over time.

That is a healthier form of discipline than prison.

It would also make Tunisia’s economy more real.

For years, many transactions have been structured around informal credit that does not appear clearly in balance sheets. A shop sells goods through cheques dated months ahead. A small company survives by pushing payments down the chain. A family consumes today against uncertain income tomorrow. The whole system keeps moving because everyone accepts a level of fiction: that a cheque is money, that future cash will arrive, that trust can replace risk assessment.

When growth is weak and liquidity tight, the fiction breaks.

The 2024 cheque reform revealed how dependent Tunisia had become on that fiction. Many households and traders did not protest because they loved cheques. They protested because the cheque had become their credit card, bank loan and payment guarantee at the same time.

A serious credit scoring system would force banks to do more of what banks are supposed to do: assess risk, price loans, finance households and businesses, and compete for good clients. Better credit information would reduce one of the main excuses for not lending: the lack of reliable borrower information.

It could also help the state. A credit economy leaves a clearer trail than a cash economy. It supports formalisation. It gives responsible businesses an incentive to declare activity because declared activity helps build creditworthiness. It reduces dependence on personal networks and pushes more transactions through traceable channels. Over time, that can support tax collection, consumer protection and financial inclusion.

The political risk is real. Many Tunisians will fear that credit scoring means imported financial surveillance, new bank power or another way to exclude the poor. Those fears should be taken seriously. Tunisia should not copy the worst versions of credit scoring, where opaque algorithms quietly determine who can rent a home, get a loan or access services.

The Tunisian model should be narrower, clearer and more protective.

It should begin with regulated financial data, microfinance, leasing, supplier payment records and selected utility or telecom data only under strict consent and legal safeguards. It should cover companies as well as individuals. It should be phased in with public education. It should include a simple appeal process. It should prohibit the use of irrelevant personal data. It should publish the categories of information used in scoring. It should allow people to recover from past default after repayment or settlement.

Most importantly, it should be introduced alongside a final shift away from prison for ordinary debt.

Fraud should remain punishable. Deliberate deception, organised cheque abuse and criminal schemes belong in the justice system. Ordinary financial failure should be handled through civil recovery, credit consequences, restructuring and repayment plans. Tunisia needs to distinguish between dishonesty and insolvency.

That distinction is essential for a functioning economy.

Entrepreneurs fail. Families face illness, job loss and inflation. Small traders are hit by late payments from bigger clients. Farmers lose seasons. Importers face currency pressure. A serious economy does not pretend these shocks disappear through criminal penalties. It builds systems that separate bad faith from bad luck, then allows productive people to return to work.

The case for credit scoring in Tunisia is therefore about the kind of discipline the country wants in its economy.

The old model used fear. The better model uses information.

The old model made the cheque a weapon. The better model makes payment behaviour a record.

The old model pushed debtors into prison, hiding or informality. The better model pushes borrowers, lenders and businesses into transparency.