Banking

The banking sector was a major facilitator of investment. The magnitude of the government's banking reforms can best be understood by comparing the current system with that of the French colonial era. Under the French, most of Algeria's banks were branches of French banks; after independence they sold out or were nationalized. The Central Bank of Algeria was established in January 1963, to replace the Colonial Bank of Algeria and act as the government's agent in financial transactions, currency issue, and other central bank functions. In 1971 the Central Bank assumed the role of supervising the country's three major commercial banks, the most important of which was the National Bank of Algeria (Banque Nationale d'Algérie), which served both the private and public sectors and held the bulk of total bank deposits. The other two, the Foreign Bank of Algeria (Banque Extérieure d'Algérie) and the Popular Credit of Algeria (Crédit Populaire d'Algérie) were more sector oriented, with the former handling energy and foreign trade and the latter financing smaller sectors.

The government's economic development and decentralization policies of the 1980s resulted in the establishment of more specialized financial institutions. The Agriculture and Rural Development Bank (Banque de l'Agriculture et du Développement Rural) provided loans to the farming and food processing industries. The National Fund for Provident Savings (Caisse Nationale d'Épargne et de Prévoyance) furnished savings and housing loans. The Bank of Manufacturing and Services (Banque des Industries de Transformation et des Services) dealt with the service sector and light industries. The Bank of Local Development (Banque de Développement Local) was formed in 1985 to finance communal development projects. The Algerian Development Bank (Banque Algérienne de Développement) was created in 1963 to provide long-term (ten- to twenty-year) loans.

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Source: U.S. Library of Congress