Tunisia’s new consumer debt law squeezes retailers and middle class

Tunisia’s financial reforms are reshaping consumer habits, forcing many to rely on cash as postdated checks—a common credit substitute—are no longer accepted. The law, aimed at reducing bad checks and financial fraud, has hit both retailers and middle-class consumers hard, the AFP reports.

For years, many Tunisians used postdated checks in place of scarce credit cards, allowing them to buy expensive items in installments. The new law mandates that checks serve only as immediate payments, eliminating their function as de facto credit. As a result, spending has dropped, leaving businesses struggling.

“No one buys anything anymore,” a Tunis shop owner told AFP, reporting that smartphone sales have fallen by more than half.

The law follows a crackdown on fraudulent check-writing. In April 2023, authorities investigated over 11,000 cases of “check-kiting” where people wrote checks without sufficient funds. To curb this, the new system caps check amounts based on the issuer’s income and requires merchants to verify funds via a QR code linked to bank accounts. However, many business owners find the verification system complex and unreliable, further discouraging transactions.

Middle-class consumers are also feeling the squeeze. “I’ve been searching for a way to buy a smartphone in installments without draining my salary,” one buyer told AFP. “But now, checks don’t allow that.”

Experts warn the restrictions could further weaken Tunisia’s fragile economy. Economist Ridha Chkoundali described the law as a potential “last straw” for growth, predicting further economic decline.

Tunisia’s economy is projected to grow by just 1.6% in 2025, according to the International Monetary Fund (IMF). Inflation remains at 6%, and unemployment hovers around 16%. Some analysts fear that declining consumer spending could trigger layoffs as businesses struggle with reduced profits.