Interview: Abderrazak Trabelsi
What progress has been made with regards to projects that aim to develop local investment?
ABDERRAZAK TRABELSI: The level of banking intermediation remains relatively low and the development of household savings over the past two years is a significant indicator in this respect. Banks are currently working to develop diversified investment products in an environment of low interest rates and excess liquidity in the national economy. The reduction of the latter requires a step up in investment coupled with an improvement in access to credit for small and medium-sized enterprises (SMEs) and very small enterprises (VSEs).
In what ways is the sector supporting the move towards electronic banking and card services?
TRABELSI: E-banking infrastructure is ready. Technical and technological questions have been prioritised and taken care of. Making the use of bank cards more widely available requires system improvements. In this regard, a project managed by ABEF involving all of the e-banking stakeholders has been implemented. The first stage of this project was the creation of a bank card group of economic interest (groupement carte bancaire d’ intérêt économique, GIE) including all the issuers as well as the Bank of Algeria. Regulation and supervision undertaken by the GIE will be separated from services and performance activities, which will continue to be undertaken by the Company for the Automation of Interbank Transactions and Electronic Banking. Tax and fiscal adjustments will be also be made with the aim of increasing the cost of cash payments and thus making credit card payments more attractive.
What efforts have been made to improve access to finance and solve debts of distressed companies?
TRABELSI: Algeria had excess bank liquidity yet companies faced limited access to loans. To address this issue, the authorities introduced a diversification of investment funding through the creation of specialised institutions (investment funds, capital investment companies, leasing companies). In addition, they created investment guarantee institutions as a response to the lack of collateral at SMEs and VSEs, which expanded the banks’ capacity to intervene.
SMEs and VSEs make up the majority of the Algerian economy (95%). However, efforts to expand lending have to take place in conjunction with a clean-up of the institutional environment (administration, Customs, tax system), which has often been subject to delays and difficulties leading to the disintegration of firms. This is one of the reasons behind the implementation of the plan that aims to reprocess the debt of financially distressed companies.
How do you evaluate the efforts made by stakeholders to improve governance and transparency?
TRABELSI: The supervision and the regulation exercised by the Algerian Monetary Authority has since the 1990 Law on Exchanges and Credit subjected banks and financial institutions to imperatives of good governance and transparency. Prudent management aligned with international practices (Basel I, II and III) and the implementation of an anti-money laundering plan made the banking sector a pioneer of good governance. It is in this spirit that the ABEF is a founder member of the Algerian Institute of Good Governance.
What are the prospects for the development of Islamic products in Algeria?
TRABELSI: There are two Islamic banks in Algeria: Al Baraka Bank and Al Salam Bank as well as an Islamic insurance company. Al Baraka Bank is one the most profitable banking institutions in Algeria, which shows the nature of the market for this type of product. There are still obstacles, some of which have been ignored due to the system’s excess liquidity. The question of funding this type of a specialised establishment remains problematic. The adjustment of the regulations allowing, for example, the issuance of Islamic bonds is a possible alternative to improve the availability of Islamic products.
