Microfinance in Algeria - Opportunities and Challenges (Final Report)

An overview of the Algerian financial sector and opportunities for microfinance development
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This report outlines the findings by the authors about policy obstacles to the development of Algeria's financial sector. The findings are:

  • Algeria has the means to implement ambitious economic and social policies;
  • It has a rapidly changing financial sector with an emerging consumer credit market and a series of legal, financial and technological reforms;
  • The economic and political climate is favorable to extending access to retail banking services and to the development of microfinance;
  • Banking regulation does not raise any obstacles, but the regulatory environment needs improving;
  • Microfinance could be developed by the creation of: finance companies, a bank that specializes in microfinance, a network of banking transaction intermediaries and cooperatives;
  • International investors are interested in supporting microfinance in Algeria.

The report identifies credit regulations and anti-money laundering laws as the problem areas in the development of microfinance in Algeria. It recommends:

  • Greater Government involvement in strengthening the financial sector.
  • The use of the following five institutional models to develop microfinance in the country:
    • Finance companies with a microfinance lending policy;
    • A partnership between Algerie Post and one or more finance companies;
    • A retail bank for low-income customers;
    • A cell-phone architecture;
    • Cooperative financial networks.
  • Regulatory changes in the areas of: anti-money laundering regulation, prudential and accounting standards and taxation.

About this Publication

By Reille, X., Lyman, T., Clerc, A., Attia, H., Benissad, H. , Lheriau, L.