Microfinance in Algeria - Opportunities and Challenges (Final Report)
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.