The bank system and the capital market

The Algerian policy for developing the bank system aims to promote competition by broadening the field of involvement to private banks, namely from abroad, just as it commits to encouraging the public sector to open up to the joint venture and to reinforce
professionalisation of its human resources.

In this context, the Algerian bank and monetary system has experienced remarkable progress, particularly since 2006.

The modernisation of payment systems has, thanks to the dematerialisation of operations, allowed manual activities to be significantly reduced, transaction costs to be reduced, and the efficiency of bank intermediation to be improved.

The private bank sector is currently experiencing significant development, even if its share in the market remains limited. It comprises some ten banks, subsidiaries of major international groups, but important changes are anticipated, as around ten other foreign banks (Arab and European) have addressed their approval request to the bank of Algeria.

To assist the businesses experiencing difficulties in offering traditional guarantees to banks to finance their investments, a credit guarantee fund for small and medium-sized) has been created, as well as, more recently, an investment credit businesses (FGAR) granted with 30 billion dinars subscribed by the public Treasury, guarantee Fund (CGCI ) banks and financial establishments.

The developments of the Algerian bank and monetary system are undeniable. However, they have not yet enabled achievement of a critical threshold which our growth demands impose on us.

The capital market :

The reform conducted in this area is done so in the sense of a progressive emergence of a financial market which allows the saver to access products ensuring positive real remuneration and allows the investor to have low-cost, quick and flexible financing.

To implement this reform, Algeria has put in place an institutional, legislative and regulatory system in accordance with the international standards.

The Stock Exchange of Algeria commenced operation in 1988 and comprises three organisations: the Commission for Organisation and Monitoring of Stock Exchange), The Stock Market Management Company (SGBV) and the central Operations (COSOB )securities agent.  

The law on capital-risk, an instrument which had been absent in the Algerian financial landscape until 2006, from now on sanctions the activities currently in progress in countries with a lot of experience in this area; and the bond market has experienced initial development.

By favouring the emergence of an operational capital market, the current transformations will contribute to converting the large savings volume available into investment, and therefore to releasing the operators from their financing restrictions. 

More details on the bank system and the capital market are available at: http://finances-algeria.org