The Bank of Algeria has directed Algerian banks and financial institutions to reduce repayment rates for loans to SMEs and startups in the country. According to the bank, this initiative is to promote local production while replacing imports.
A note sent to banks and financial institutions by Bank of Algeria reads, in part, as follows:
“Having reviewed the main developments in the national and international economic, monetary and financial situation; as well as its short- and medium-term prospects, the regular meeting of the Monetary Policy Operations Committee (COPM)(concluded on the 29th of April, 2020, under the chairmanship of the Governor of the Bank of Algeria, Aïmene Benabderrahmane.), invited banks and financial institutions to fully adhere to these decisions by deploying all the measures to make available to small and medium-sized businesses, startups and investors in general, a credit offer at a reasonable cost.’’
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The bank noted that this will allow the development of the national economy towards new perspectives by firmly engaging in a process of modernization and promotion of the national production tool as well as substituting imports with products that meet international standards.
On the other hand, the committee approved a reduction of 0.25% in the key rate. According to the bank, the key interest rate is now set at 3% instead of 3.25%. This instruction takes effect from the date of signature, noted the bank.
This is even as startups in Algeria may be the next in line in Africa to get a Startup Act.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer