Algeria: Credit to SMEs is increasing, but the FCE thinks the govt can do more

Mar 01, 2012

The Algerian Local Development Bank (BDL) granted 6,600 loans to SMEs in 2011, with a global total of DA 164 billion (€1.65 billion), which represents a 27 percent increase compared with 2010.

According to a report from the BDL published by APS news agency, this increase is due to the natural growth of the bank's portfolio as well as financial support brought from the state.

Since last July, the government has encouraged banks to maintain the 5.5 percent interest rate applied to investment loans granted to SMEs and authorised the Treasury to apply a two percent bonus on this interest.

Initiatives to stimulate lending to Algerian SMEs should continue through 2012.

However, despite these initiatives, the employers association FCE believes the government must do more to promote SME financing.

In a study addressed to the government quoted by Liberté Algérie newspaper, it recommended the creation of banks specialising in SME financing, “in the shape, for example, of a mixed status with a participation to the capital of the State Investment Fund or the Fund for Industrial Competitiveness".

This bank could, according to the FCE, stimulate the banking system by reducing the delays to treat credit applications, diversifying banking products and by developing skills in studying credit applications from SMEs.ADNFCR-2976-ID-801306753-ADNFCR