Measuring indicators of the development of the banking sector in the face of obstacles to financing economic activity in Algeria during the period (2000-2019)‎

Abstract EN

The banking sector plays an essential role in the development process through basic services, such as mobilizing financial resources from surplus economic units and transferring them to units with deficits in a way that ensures optimal allocation of resources, a monitor for the businesses of companies that borrow from banks, a facilitator for trading, and a provider of the hedging mechanism and diversification of risks.

In the case of Algeria, pressures have increased on the banking sector due to the weak financing role of the stock exchange to finance economic activity and achieve the required growth rate.

The intensity of pressures increased due to internal and external challenges, such as the ineffectiveness of financial and banking activities.

In this context, this paper aimed to present the development of the Algerian banking system while listing the most critical challenges facing it.

Moreover, measuring indicators of the development of the banking sector, especially concerning the traditional activity of mobilizing deposits and providing credit.

The study found that significant functional and structural imbalances hinder banking work by measuring those indicators, such as cash circulation outside banks, which requires more reform and modernization efforts that focus on developing the macroeconomic and banking activity environment.