Practice of leasing in Algerian Legislation: Legal and economic approach

Abstract

Many countries, faced with the shortcomings of traditional financing methods, are now seeking more flexible, cost-effective financial solutions that help overcome potential obstacles. In response to global economic changes, these countries, including Algeria, have turned to commercial credit options such as leasing. The Algerian legislator, in Ordinance 03-11 on currency and credit, which amends and supplements Ordinance 96-09 on leasing, defines leasing as a commercial and financial operation. This operation is carried out by banks, financial institutions, or leasing companies that are legally authorized and explicitly licensed to do so, in partnership with Algerian or foreign economic operators. These operators can be natural or legal persons governed by private or public law. The contract is based on a lease agreement, which may or may not include a purchase option for the lessee, and pertains exclusively to movable or immovable assets used for professional, commercial, or artisanal purposes. Therefore, leasing, or the leasing contract, is an effective financing tool in Algeria. It provides viable means for funding economic projects and various investments, helping to achieve the desired economic objectives, especially given the proven limitations of other traditional financing methods in fulfilling their role.