TUNISIA Housing Profile
standards, mainly through the funding of housing improvements of the very poor living in upgrading and rehabilitation areas both in Greater Tunis and other large towns.
7.2 FINANCING TO INDIVIDUALS FOR NEW HOUSING UNIT ACQUISITION Over the years a number of schemes have been developed to provide financing to individuals to purchase or construct their own homes. These stretch back to the 1950s, when classic highly subsidized government housing loans were provided to low income beneficiaries. No equity contribution was required and loans for up to 30 years bore no interest. These programmes were modified in the late 1960s, and loans were made available which had terms of 20 years, annual interest at 5 per cent, and 20 per cent of equity as down payment. Still later terms were reduced to 15 years and 30 per cent down payments were required. It is obvious that at that time the government was becoming more concerned at the huge cost of highly subsidized schemes.2 Currently the main housing loan programmes in Tunisia for new housing unit acquisition are as follows: Savings/loan regime for housing purchase This system was started in the late 1970s by CNEL (the precursor to BH) as a means to instil a tradition of family savings in Tunisia. Since 1989 and under the BH, the government has adopted a number of efforts to strengthen the savings/loan system and to make it more attractive. Improvements were, for example: •
Supplemental credit for unit acquisition allowed equal to the amount saved
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Interest rates for loans reduced from 8.25 per cent to 6.75 per cent (at the same time saving rates were reduced from 6.75 per cent to 5.25 per cent). The spread, at 1.5 per cent, remained the same.
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Increase in the loan amount to 2.5 times the amount saved over 5 years and 3.0 times for the amount saved over 6 years.
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Introducing a loan repayment grace period for some clients
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Creation of a new category which, for a savings of TD 20,000, allows a base credit of TD 60,000 plus a supplementary credit of TD 40,000.
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Increasing the loan term from 13 and 20 years to 25 years. 60
Even with these and other measures taken to strengthen and expand the saving/loan regime for housing, it appears that it has yet to take the large role in housing finance envisioned. For example, the BH issued only TD 53.7 million in savings/loan credits for housing in 2009, down from TD 66.1 million the previous year. This may be due to the recent introduction by BH of the AL Jadid Savings scheme, which also required prior savings. The Al Jadid Savings scheme is described below. FOPROLOS The Housing Fund for Salaried Employees (FOPROLOS, Fonds de Promotion des Logements pour les Salariés) was started in 1977, has gone through a number of modifications, and is managed by the BH. It is a direct loan system to individuals or families. Curiously, loan terms and sizes are based on what the government has determined as the industrial minimum (monthly) wage (SMIG, salaire minimum industriel garanti). This base wage is currently set at TD 280 and is only rarely adjusted upward, never enough to keep up with consumer inflation. There are currently three FOPROLOS loan categories and these are presented in Table 7.1 The three categories of FOPROLOS aim at very low income to moderate income individuals and families. FOPROLOS 1, which is very much subsidized, is affordable down to the second decile of current urban household income distribution and even below that. (See Chapter 4 for derivation of affordability.) FOPROLOS 2, which is somewhat subsidized, can be affordable by the fourth to the sixth decile of urban household distribution. FOPROLOS 3 which is still somewhat subsidized, is only affordable by those whose incomes put them in the seventh decile of urban household distribution or above. In 2009, to make FOPROLOS loans even more attractive, subsidy rates have increased and annual interest rates have been reduced for FOPROLOS 1 from 3.5 per cent to 2.5 per cent, for FOPROLOS 2 from 5 per cent to 4 per cent, and for FOPROLOS 3 from 6.75 per cent to 5.75 per cent. Al Jadid Savings The BH has recently added a range of three “supplemental” loan schemes, which are based on prior family savings, called Al Jadid 1 Al Jadid 2, and Al Jadid 3. Conditions for these schemes are shown in Table 7.1. They are all aimed at families whose incomes are higher than those of the FOPROLOS schemes, and all interest rates are fixed at 7 per cent per year for a maximum loan term of 15 years. They vary in the number of years of prior savings (from 4 to 6 years)