The Guarantee Fund FGAR As A Public Mechanism To Promote Entrepreneurship Beyond The Hydrocarbon Sector

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.