THE GUARANTEE FUND FGAR AS A PUBLIC MECHANISM TO PROMOTE ENTREPRENEURSHIP BEYOND THE HYDROCARBON SECTOR
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Date
2017
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Publisher
Oum-El-Bouaghi University
Abstract
The promotion of non-hydrocarbon investments remains the main
occupation of the Algerian government. The Algerian economy's
dependence on hydrocarbons sector remains with 95% of export earnings,
despite all the efforts and attempts token by the Algerian state. Over the
last few decades, several measures have been adopted to encourage
entrepreneurship and boost investment, by lessening the constraints that
face the entrepreneur, in particular, the access of finance. To alleviate
this problem, the Algerian government has created, in 20014, the
Guarantee Fund for Loans to SMEs (FGAR). It provides guarantees on
loans to borrowers by covering a share of the default risk. The aim of this
paper is to evaluate the performance of this fund, as a guarantee provider,
by analyzing its data and examining its effect on the level of the
development of entrepreneurship in Algeria since its creation. The main
result is that this guarantee fund has a positive tangible impact on the
development of entrepreneurship. Though it has grown in terms of
number, entrepreneurship still face various challenges and issues in both
enterprise and environment levels that undermine their business conduct.
Therefore, much effort is needed in the future to promote and boost the
entrepreneurship in order to benefit from all the advantages it gives.
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Keywords
Entrepreneurship, SMEs, FGAR guarantee fund, Economic development, Finance