Algerian public banks have played a crucial role in financing small enterprises and projects led by young entrepreneurs, with over 700,000 projects financed since the creation of public support systems for entrepreneurship. The total amount allocated for these projects has exceeded 1,400 billion Algerian dinars. These figures, provided by the Ministry of Finance, highlight the challenges of financing small enterprises in Algeria, particularly in the context of repayment difficulties and the need to improve access to bank credits.
The Algerian government has implemented various mechanisms to support entrepreneurship, including the National Agency for Support and Development of Entrepreneurship (NESDA), the National Unemployment Insurance Fund (CNAC), and the National Agency for Micro-Credit Management (ANGEM). These structures have enabled hundreds of thousands of project leaders to access financing to launch and develop their businesses. However, this experience has also revealed significant difficulties in repaying the credits granted, leading banks to be more cautious in their lending practices.
To address these challenges, Algerian banks are now placing greater emphasis on the economic and financial viability of projects before granting financing. The study of dossiers now takes into account the prospects for the continuity of the activity, the skills of the project leader, and their ability to ensure the continuity of their business. The role of banks is no longer limited to disbursing credits; they are also called upon to evaluate the feasibility of investments to avoid a return to mass financing practices.
To respond to the financial difficulties encountered by beneficiaries of entrepreneurship support systems, several regularization mechanisms have been put in place. A new device introduced in 2026 provides for a significant reduction in the debts contracted by beneficiaries, subject to compliance with applicable regulatory conditions. This measure includes a total exemption from interest and late penalties, provided that the beneficiary repays the principal amount of their debt in full.
The new device also provides for the possibility of rescheduling credits over a period of up to five years, allowing beneficiaries to spread out their debt repayment and gain more financial flexibility. Additionally, the State continues to provide financial support to small business support systems, covering the costs related to interest rate bonification and providing interest-free loans to project leaders.
Algerian public banks are not the only players in the financing of small enterprises. The Algerian Startup Fund (ASF), a private equity firm owned by six public banks, provides financing to innovative start-ups and projects with growth potential through equity investments. This approach allows the fund to become a shareholder in the start-ups it supports, contributing to their development and sharing the risks associated with their activity.
The Algerian government aims to preserve public support mechanisms for entrepreneurship while encouraging beneficiaries to regularize their financial situation. The authorities are seeking to strike a balance between promoting youth entrepreneurship and preserving bank resources, without undermining public support systems. The implementation of these measures is expected to improve access to financing for small enterprises and promote the development of entrepreneurship in Algeria.
Key points
- Algerian public banks have financed over 700,000 projects since entrepreneurship support systems were established.
- Repayment difficulties have led banks to be more cautious in their lending practices.
- New measures have been introduced to support beneficiaries of entrepreneurship support systems, including debt exemptions and rescheduling options.
