Borrowing from relatives or private individuals in Algeria
In Algeria, lending between individuals is legal and very common among relatives, usually without any interest, while crowdfunding, regulated by the COSOB market authority, targets business projects rather than everyday household needs.
A practice rooted in Algerian family solidarity
Between brothers, cousins or neighbours, lending money pays for a wedding, a property down payment or a move abroad. It rests on trust and is often repaid without a strict timetable, which also fuels lasting family disputes.
Qard hassan, the social norm
The prohibition of riba leads most Algerian lenders to refuse any interest. Qard hassan, the benevolent loan, remains the reference, and asking for a return is frowned upon, even between mere acquaintances or work colleagues.
What the Algerian Civil Code provides
The Algerian Civil Code sets the principle that a loan between individuals carries no remuneration, and an interest clause may be cancelled. The lender therefore gets the capital back with no return, which clearly sets this loan apart from bank credit.
Drafting an IOU for a family loan
A dated document signed by both parties, stating the amount in dinars and the due date, makes proof easier. Signatures can be certified at the APC town hall, and a notarial deed offers greater security for large sums.
Foreign currency loans and the parallel exchange rate
Many family loans involve euros brought by a relative who emigrated to France. Repaying in dinars at the parallel market rate or at the official rate gives very different amounts, so it pays to set the currency and rate in writing.
Crowdfunding regulated by COSOB
The 2020 finance law introduced crowdfunding, whose platforms must be approved by COSOB. This mechanism targets start-up and small business projects, not emergency help for households, and it is still recent in Algeria.
Rotating savings groups among colleagues
In some offices and neighbourhoods, groups pay in a fixed sum in dinars each month, handed to one member in turn. This informal system pays for equipment or a trip, but offers no recourse if a member defaults.
When a family loan replaces the bank
For someone without domiciled income, help from a relative is often the only source of funding, as our page on the loan for the unemployed in Algeria explains. It is then best to agree a realistic repayment schedule from the start.
Fake lenders targeting Algerians on Facebook and TikTok
Facebook pages and TikTok accounts offer peer-to-peer loans to Algerians in exchange for application fees paid into a CCP account or via BaridiMob. The loan never arrives, and the money sent is very hard to recover.
Family mediation, then the civil court
The lender can first try family mediation, then take the IOU to the civil court. A bailiff then enforces the judgment, but the procedure takes time and involves legal fees for a lawyer.
Traceability of large sums in Algeria
Large amounts moving between accounts can draw the attention of banks under anti-money laundering rules. Keeping a written record of the loan and preferring a transfer to cash makes it easier to provide any explanations requested.
Placing private lending in the wider picture
This type of loan complements the banking system described in our overview of credit in Algeria. Practices are similar among Maghreb neighbours, as shown on the page about peer-to-peer loans in Tunisia.
Securing a loan of money between relatives
- Agree together on the amount in dinars or foreign currency, the repayment date and how payments will be made.
- Draft a dated and signed IOU in two copies, with the full contact details of both parties.
- Have the signatures certified at the APC or go before a notary for a large sum.
- Pay the money by bank or postal transfer so that you keep proof of the transfer.
- Keep receipts for each partial repayment until the debt is fully settled.
Hidden costs of a loan between individuals
| Item | Usual level | Deciding factor |
|---|---|---|
| Interest | Nil in principle | Civil Code rule and qard hassan practice |
| Signature certification | Small fee at the APC | Municipality |
| Notarial deed | Notary's fees | Amount lent and complexity of the deed |
| Exchange rate gap | Variable | Gap between official and parallel rates |
| Recovery costs | Lawyer and bailiff | Length of the procedure |
Paperwork worth keeping for an Algerian family loan
- Identity documents of both parties
- Signed and certified IOU
- Proof of the bank or postal transfer
- Written repayment schedule
- Receipts for each repayment
Common mistakes in loans between individuals
- Lending a large sum on a simple promise, with nothing in writing, then being unable to prove the debt in a family dispute.
- Sending insurance or application fees to a so-called foreign lender met in an Algerian Facebook group.
- Not stating the currency of a loan in euros, which creates a dispute over the exchange rate at repayment time.
- Handing over cash without a receipt, when a transfer would have left an indisputable bank record.
Lenders to contact
- Al Baraka Bank Algérie: Algerian Islamic bank that launched two new home financing products in 2024 built on Islamic finance principles for its customers.
- Banque Al Baraka d'Algérie: Algerian Islamic bank providing Sharia-compliant financing to individuals, professionals and companies, including ijara leasing and consumer financing products.
- BNP Paribas El Djazair: Algerian subsidiary of the BNP Paribas group, a commercial bank serving individuals and businesses through its branch network in Algeria.
Lending or borrowing between individuals in Algeria
Can a private individual charge interest in Algeria?
The Algerian Civil Code sets the principle of an unpaid loan between individuals, and an interest clause may be cancelled by the judge. In social practice, an interest-free loan is the norm anyway, especially between members of the same family.
Are there peer-to-peer lending platforms in Algeria?
Crowdfunding platforms must be approved by COSOB and mainly target business projects. Sites or pages offering personal loans between strangers without approval should be treated with great suspicion.
How do you prove you lent money to a relative?
With a written and signed IOU, ideally certified at the APC or drawn up before a notary, backed by proof of the transfer. Witness statements remain possible, but a written document greatly simplifies any court action.
What legal remedies exist in Algeria against a relative who does not repay?
Start with a written reminder and family mediation, then consult a lawyer. With an IOU, the court can order the borrower to pay, and a bailiff then takes charge of enforcing the judgment.