Algeria: “Re-established Consumer Credit Ready For Implementation”

The Secretary-General of the Federation of textile and leather and a UGTA senior executive, Amar Takjout, said that the effective implementation of the restored consumer credit in Algeria is just awaiting the promulgation of the relevant legal text in the Official Gazette, saying that everything is ready to ensure the implementation of such a long-awaited government decision on the ground.

He told Wednesday the first Channel of the Algerian radio in Algiers that the consumer credit file had been wrapped up by the parties concerned and its effective implementation would take place in the first quarter of the year 2015 at the latest.

For the time being, some technical details are being brought to the relevant text before its actual enforcement, Mr Takjout explained.

In so doing, the Bank of Algeria is to establish a credit rating system to support the return in 2015 of consumer credit for locally produced goods.

Mr Benkhalfa, independent economic consultant and former delegate of the Association of Banks and Financial Institutions (Abef), told local media outlets that the system is almost ready, adding that it “doesn’t have to be operational on the first day”, but it is essential that it is “in the early months of 2015 to be able to control debt”.

The reintroduction of consumer credit has been established by the Finance Act 2015. Mr Benkhalfa said this operation, although beneficial to the economy, is difficult to implement because credit is only available to purchase goods produced in Algeria.

He explained that banks are waiting for a regulatory mechanism to know the list of products that can be financed by consumer credit.

The Algerian government had decided to abolish consumer credit in 2009 after the country was hit by the global economic crisis.

The specific terms of the new consumer credit regulations were the subject of lengthy discussion between the government, banking institutions, business employers and the Ugta Union. In an effort to further encourage local production, as with cars, the regulation is expected to apply only to locally produce household consumer goods.

This limits significantly the reach of the measure, however, as locally produced goods account for only 30% of household consumer purchases.

The terms of application of the measure may be broadened to include goods with a certain degree of local input, according to reports in local media.