Financial Services

Algeria’s banking sector has held up relatively well. Credit growth remained in positive territory through the first three quarters of 2017, albeit having slowed from the double-digit rates seen prior to 2016. Lenders are capitalised well in excess of Basel III norms, while profitability remains high, particularly among private sector banks. Internet and mobile banking are still in the early stages of development, but market observers see these technologies as having great potential to improve financial inclusion if the relevant legal, regulatory and logistical frameworks are put in place. As bank borrowing becomes increasingly expensive, capital markets are emerging as a financing alternative for a range of domestic firms. The stock market will simultaneously provide non-inflationary financing means to economic agents and have better savings yields. With only a few new entrants to the market, the structure of Algeria’s insurance sector has remained relatively stable, with the four largest state-run insurers continuing to dominate. Purely private sector insurers capture less than one-quarter of the market, despite making modest gains of late. While the life insurance segment accounts for just 10% of total premiums, its growth has been outperforming the non-life segment – a trend that looks set to continue.

This chapter contains interviews with Mohamed Loukal, Governor, Bank of Algeria; Nafa Abrous, CEO, Maghreb Leasing Algérie; Lazhar Sahbani, Partner, PwC Algeria; and Mohamed Benarbia, General Manager, Salama Assurances Algeria.