Circular to Banks No. 12 of 2024 Regulating State Subsidy for Interest Rate Differential on Seasonal Grain Loans to Small Farmers

Tunisia, October 17, 2024
Circular to Banks No. 12 of 2024

Subject: Regulating the conditions and methods for disbursing amounts related to benefiting from the State's subsidy of the difference between the interest rate applied on seasonal loans for grain crops and the money market interest rate, capped at three points, regarding loans granted by banks from their own resources to small farmers in the grain crop sector.

The Governor of the Central Bank of Tunisia, having reviewed Law No. 35 of 2016 dated April 25, 2016, regulating the basic system of the Central Bank of Tunisia; Law No. 48 of 2016 dated July 11, 2016, relating to banks and financial institutions; Decree No. 79 of 2022 dated December 22, 2022, relating to the Finance Act for 2023, particularly Article 15 thereof, as amended by Law No. 13 of 2023 dated December 11, 2023, relating to the Finance Act for 2024, particularly Article 25 thereof; Order No. 545 of 2023 dated July 20, 2023, regulating the conditions and procedures for benefiting from the State's subsidy of the difference between the interest rate applied on seasonal loans for grain crops and the money market interest rate, capped at three points, regarding loans granted by banks from their own resources to small farmers in the grain crop sector, as amended and supplemented by Order No. 467 of 2024 dated August 21, 2024; Circular No. 47 of 1987 dated December 23, 1987, relating to loan granting, monitoring, and refinancing methods, as amended by subsequent texts; and the Opinion of the Compliance Committee No. 12 of 2024 dated October 16, 2024, stipulated in Article 42 of Law No. 35 of 2016, particularly paragraph 2 regarding circulars with a definitive nature.

Decrees as follows:
Article 1: An account is opened in the books of the Central Bank of Tunisia, pursuant to Article 4 of Order No. 545 of 2023 mentioned above, named "State Subsidy Account for the Difference between the Interest Rate Applied on Seasonal Loans for Grain Crops and the Money Market Interest Rate for Small Farmers in the Grain Crop Sector".
Article 2: The resources of the account referred to in Article 1 are used to disburse amounts resulting from applying the State subsidy scheme for the difference between the interest rate applied on seasonal loans for grain crops and the money market interest rate, capped at three points, regarding loans granted by banks to small farmers in the grain crop sector during the farming seasons 2022/2023, 2023/2024, and 2024/2025, without exceeding the margin applied by banks of 3.5%.
Article 3: The benefit under Article 15 of Decree No. 79 of 2022 dated December 22, 2022, relating to the Finance Act for 2023, covers seasonal grain loans granted by banks from their own resources to small farmers with a principal amount not exceeding 50,000 Tunisian Dinars (50,000 TND) and supplementary loans not exceeding 15,000 Tunisian Dinars (15,000 TND), without requiring beneficiaries to submit applications. This scheme applies to seasonal grain loans granted during the farming seasons mentioned in Article 2, according to loan granting standards under current regulations, particularly provisions of Circular No. 47 of 1987 dated December 23, 1987.
Article 4: Amounts resulting from applying the scheme are disbursed to concerned banks from the account resources referred to in Article 1 after the benefiting farmer settles part or all of their seasonal loan amounts, deducted from the amounts resulting from this scheme, within a maximum deadline of December 31, 2024 for the farming season 2022/2023; December 31, 2025 for the farming season 2023/2024; and December 31, 2026 for the farming season 2024/2025. For this purpose, banks must submit withdrawal requests to the Central Bank of Tunisia within a maximum deadline of March 31, 2025 for the farming season 2022/2023; March 31, 2026 for the farming season 2023/2024; and March 31, 2027 for the farming season 2024/2025. The withdrawal request must necessarily include evidence of the partial or full settlement of the loan amount, specifically the following documents: a copy of the loan contract; a repayment schedule; the bank's identification number for the account; and a detailed statement specifying partial or full withdrawals and amounts resulting from the State subsidy under this scheme, capped at three points, according to the form shown in the annex to this circular. For seasonal or supplementary loans granted and fully or partially withdrawn before the issuance of this circular, farmers benefit from the scheme stipulated in Article 1 of Order No. 545 of 2023 dated July 20, 2023. Banks must necessarily submit proof thereof before December 31, 2024, according to the form shown in the annex. In this case, due amounts within the benefit of the aforementioned scheme are disbursed to the bank, which transfers them directly to the concerned farmer within fifteen (15) working days following the booking date in the bank's accounts, per Order No. 467 of 2024 dated August 21, 2024.
Article 5: Banks must instruct their auditors to prepare an annual report on compliance with the provisions of this circular, including a breakdown of granted subsidies by beneficiaries. This report is submitted to the Ministry of Finance and the Central Bank of Tunisia within a deadline not exceeding March 31 of the following year.
Article 6: This circular enters into force from the date of its publication.

Governor, Fethi Zouhair Nouri

Annex to Circular No. 12 of 2024 dated October 17, 2024: Detailed statement of amounts resulting from the State subsidy for the difference between the applied interest rate on seasonal loans for grain crops and the money market interest rate, capped at three points.

Unique ID	Beneficiary	Loan Amount	Loan Nature (Principal/Supplementary)	Settlement Date	Applied Rate	Margin Applied	Interest Amount	Withdrawn Interest Amount	Principal Amount Withdrawn	State Subsidy Amount	Total