Lending is up in Algeria

Mar 28, 2013

New figures from the Central Bank of Algeria (BA) indicate that banks lent more in 2012 than in 2011.

The country's banks have granted last year nearly 4300 billion dinars (€42.3 billion) worth of loans to the economy, up 15.3 percent from 2011, according to the latest figures from the BA, published by the newspaper La Tribune.

Out of all these loans -nearly half were long-term - 52.33 per cent were granted to private companies and 6.88 per cent were allocated to households.

The bank lending channel "remains potentially important in financing productive investment and non-oil growth in Algeria with a strengthened role for commercial banks in the development of performing loans to the economy," stated the note.

The country has embarked on a programme of modernising the banking and financial sector with a view to stimulating growth, and promoting and diversifying investment, developing SMEs and creating jobs.

The Currency and Credit Council (CMC) in 2008 increased the minimum capital for banks and bank branches to 10 billion dinars (€ 98 million) as opposed to 2.5 billion previously.

In 2011, he established a system of internal surveillance and limitation of counterparties of outstanding interbank loans and borrowing, in particular on the money market.

According to the African Economic Outlook website, these new mechanisms have enhanced the stability and robustness of the banking system.