Algeria’s Private Banks Stagnate: One Branch Opened in 2024 Amid Soaring Cash Circulation

Algeria’s private banking sector showed minimal growth in 2024, opening only one branch, while public banks continued to expand and cash circulation outside the system reached alarming levels.

At the end of 2024, Algeria had 1,673 bank branches across the country. The sector added 21 new branches during the year, compared to 25 in 2023. Public banks were responsible for almost all of this expansion, adding 20 new outlets. In stark contrast, private banks—despite representing 13 institutions—opened just one new branch, exactly as in 2023.

This sluggish performance is not new. The private banking network lost two branches in 2022 and has added only two branches in the past two years combined, highlighting a clear stagnation.

Rising Cash Circulation Outside Banks

This lack of expansion comes as non-bank currency circulation grew by 10.76% in 2024, reaching 8,894.52 billion dinars. Cash outside banks now represents 39.30% of money supply growth, a worrying sign for financial stability.

Experts stress that while digitalization reduces dependence on physical branches, Algeria has not reached the scale where online services can offset the need for widespread branch networks.

Algeria Lags Behind Regional and Global Standards

In 2024, Algeria averaged one branch per 26,917 inhabitants, a ratio virtually unchanged from 2023. Globally, the average density is one branch per 10,000 inhabitants.

Neighboring Tunisia presents a sharp contrast. By the end of 2022, its branch network expanded from 1,992 to 2,031, achieving one branch per 5,812 inhabitants, nearly five times denser than Algeria’s.

Expanding Branch Networks Key to Financial Inclusion

According to FINABI Conseil, the limited reach of Algeria’s banking sector hampers financial inclusion and fuels reliance on cash. The consultancy estimates that moving closer to international standards could reduce cash circulation outside banks by 30%, significantly strengthening the formal financial system.

The stagnation of Algeria’s private banks in expanding their networks reflects deeper structural issues. Unless addressed, the country risks widening its gap with regional peers and missing opportunities to modernize its financial system and improve financial inclusion.