• Reference: P-DZ-HA0-002
• Approval date: 22/11/2007
• Start date: 21/11/2008
• Appraisal Date: 10/10/2007
• Status: OngoingOnGo
• Implementing Agency: MINISTERE DELEGUE CHARGE DE LA REFORME FINANCIERE (MDRF)
• Location: ALGER

Context

Over the past few years, as part of the modernisation of its banking system, Algeria has set up a program to develop its banking payment system and more specifically for electronic banking. A pilot program for the development of electronic banking in the Algiers region is nearing completion and will be followed by its gradual extension throughout Algeria. This program has already been the subject of an audit which produced a series of recommendations and road maps which are being implemented. However, despite all the measures taken, some significant delays have been noted and the achievements are still too modest.

This situation is due to several factors relating to the mastery of technology, organisation, cohesion of institutional structures as well as commercialization and marketing.  Against this backdrop, the Algerian government sought technical assistance from the African Development Bank (AfDB) to speed up the development of electronic banking, through a consulting firm which not only has expertise in electronic banking technology but also in its organisational, institutional and legal aspects, as well as in techniques for the commercialization and marketing of  electronic banking products.

Rationale

Technical assistance will speed up the development of electronic banking, through a consulting firm with expertise not only in electronic banking technology but also in its organisational, institutional and legal aspects as well as in techniques for the commercialization and marketing of  electronic banking products.

Objective

The specific objectives of the operation are:

• the identification and analysis on the basis of a rigorous and systematic approach to the technical, organisational and institutional difficulties and constraints which hqve been causing the delays in electronic banking in Algeria;
• the development of a cohesive and holistic solution acceptable to all of the stakeholders as well as a plan of action to overcome such obstacles and ensure the development of electronic banking, while drawing on the lessons from the experiences of other countries in a similar situation;
• preparing the Algerian authorities for the implementation of this solution and the verification of its effectiveness and cohesiveness.

 

Description

Technical assistance will thus be in the form of a study.  It will be provided by the Consulting Firm and will focus on three major components which are:

1. the diagnosis 
2. the design of a new architecture and a plan of action; and
3. communication of the outcomes and efficiency tests. 

1. The diagnosis consists of deepening the analysis of the current situation and properly identifying the obstacles to the development of electronic banking in Algeria. To that end, a review will be conducted of  the implementation and design of the road maps prepared on the basis of the audit carried out. The analysis will concern each of the six public banks as well as the current interbank electronic banking operator in Algeria and SATIM. The Consulting Firm will consult all the bodies concerned by electronic banking (the remaining banks, the Bank of Algeria, the Post Office, and Algérie Télécom) and will examine all the means of coordinating electronic banking. As for the other banks, they will be consulted but not diagnosed because their situation is not constraining; 

2. The design of a new architecture  consists in the design of a cohesive, holistic and optimal solution integrating all the already-mentioned aspects of electronic banking (technical, organisational and institutional, legal and commercial) and all of its operators, taking into account best international practices as well as the constraints and specificities of. The study will take into account what aleady exists, especially the road maps already established and will propose corrective measures that will speed up their implementation. However, this study will have to be innovative in addressing unresolved problems, in particular at the institutional and organisational levels. Action programmes, new institutional and organisational plans new operating rules or  new regulatory texts (compatible with the country’s fundamental law) and a marketing plan will be presented. 

3. Communication of outcomes and efficiency tests: The Algerian authorities and those in charge of  electronic banking must be prepared to implement the proposed new architecture and plan of action within three months of their validation by the Steering Committee. Under this component, the Consulting Firm will organize and lead workshops for key electronic banking officials allowing them to prepare to assume the implementation phase. All of the stakeholders must be sensitized to assist them in assuming ownership of the new architecture and the plan of action in order to implement them. The Consulting Firm will also verify the validity, efficacy and consistency of the proposed solution on a practical level using well-defined tests and procedures. At the end of this phase, the final report as well as the deliberations of the three work shops, including the one for Phase III, will be submitted to the steering committee for validation.

Impact

Gradual extension of the bank payment and electronic banking system throughout Algeria.

EGUIDA Kossi Robert - ORNB

Finance source	Amount
MICF	UAC 494,800
Government	UAC 26,040
Total	UAC 520,840