The Reliance of Small and Medium Enterprises on Islamic Financing Formulas in Algeria

Abstract

Small and medium enterprises in Algeria can rely on Islamic financing formulas as a genuine and complementary alternative to conventional financing, particularly in financing investments, purchasing equipment, and financing the operating cycle. The success of Islamic financing formulas, however, requires expanding the network and products of Islamic banking, simplifying financing procedures, strengthening collateral, spreading awareness and Islamic financial literacy, and encouraging formulas based on risk and profit sharing. The future of Islamic finance in Algeria therefore depends on the ability of banks and public authorities to turn the existing legal framework into a more diversified and effective financing practice on the ground.