The usury rate in Algeria: the caps protecting your credit, semester after semester

Q: Usury rate versus excessive rate: what difference?

Both expressions point to the same operational reality in Algeria: the threshold beyond which a granted credit becomes abusive. Algerian regulation officially speaks of an "excessive interest rate", set twice yearly by the Bank of Algeria; "usury rate" is the common name inherited from international banking vocabulary.

Q: Why are the caps falling in the second half of 2026?

Because thresholds follow the averages observed among banks over the previous semester, uplifted by a margin brought from 10% down to 5% by instruction No. 06-2026. Downward average rates combined with a compressed margin mechanically produce lower caps, all categories included.

Q: Do these caps concern companies as much as individuals?

Yes. Each category covers a nature of facility, not a type of client. A company investment credit falls into medium or long term according to its duration, a treasury overdraft into the overdrafts category, and leasing has its own line.

Q: What should I do if an offer shows a TEG above the cap?

Ask first in writing for the detailed composition of the announced TEG, then compare it with your own calculations. Should the overrun persist, recall the threshold in force for the relevant category together with its reference, note No. 01-2026 of 30 June 2026, and request a restructuring bringing the TEG within limits.

Q: When will the next caps be published?

End of December 2026, as every year, covering the period through end June 2027. It is the same half-yearly appointment that governs updating the ProfitPilot simulator's parameters: thresholds are folded in at each official publication.

BENSAID Farouk — Financial Expert 22 August 2026 7 min read Updated: August 2026

In short: Twice a year, the Bank of Algeria sets the maximum price at which a credit can be granted, category by category, from the total effective rates declared by banks. Above the threshold, a credit becomes excessive. For the second half of 2026 every cap recedes, and the tolerance margin has just been cut in two. The framework, the official figures, and the check you can run yourself.

Keywords in this article

usury rate excessive interest rate Bank of Algeria total effective rate threshold medium-term credit bank declarations semester leasing overdraft

1. Who sets the usury rate, and how?

The usury rate mechanism boils down to three steps, repeated each semester since instruction No. 08-2016 of 1 September 2016.

First come the declarations by banks to the Bank of Algeria of the total effective rates they genuinely practice, fees included. Then the Direction générale du crédit extracts the average effective rate observed for each facility category — overdrafts, consumer credit, short term, medium term, long term, housing finance, leasing. Finally a threshold is set above that average: any facility granted at a TEG exceeding it constitutes an excessive-rate credit.

On 29 June 2026, instruction No. 06-2026 tightened the rule at its core. The margin tolerated above the average rate, formerly 10%, now stands at 5%. The Bank itself presented it as halving the legal tolerance margin granted to financial institutions, across all seven categories.

2. What are the caps for the second half of 2026?

Note No. 01-2026 of 30 June 2026 publishes the table applicable until end December. Here it is in full, with the average observed in the first semester beside each threshold.

Facility category	Average effective rate H1 2026	H2 2026 threshold
Overdrafts	7.51%	7.89%
Consumer credits	9.42%	9.89%
Short-term credits	6.86%	7.20%
Medium-term credits	6.04%	6.34%
Long-term credits	5.74%	6.03%
Housing finance	6.71%	7.05%
Leasing	10.09%	10.59%

Two readings impose themselves. First the general decline: every threshold retreats against the first half, when medium term still stood at 6.93% and leasing at 11.01%. Next the gap between average and threshold, which narrows everywhere to around five percent since the new instruction. An investment credit over seven years, medium-term category, can therefore no longer be granted beyond 6.34% TEG. Full stop.

Leave the check to the calculation. The investment credit simulator carries these caps inside it and flags any overrun together with the reference of the text in force, on every simulation.

3. What happens if your offer's TEG exceeds the threshold?

A concrete case. A bank offers you an equipment credit over six years. Its nominal rate displays 5.90%, below the caps as seen from afar. Add processing fees, commitment commission, insurance and guarantee, and its TEG climbs to 6.70%.

Your credit falls into the medium-term category, whose threshold is 6.34%. The TEG overruns it by 0.36 points: this facility enters the excessive-rate zone. That is not a stylistic nuance. An excessive credit exposes the agreement to requalification, and the bank to a regulatory reminder. In our practice, such an overrun is almost always settled before signature, either by folding the fees back into the rate, or by a calibrated lengthening of duration that brings the TEG under the threshold.

The reflex to adopt is recomputing the total effective rate of any proposal yourself, then facing it with its category's cap. If your own calculation exceeds the bank's without written explanation, the conversation to open concerns the fee breakdown, line by line.

4. How can you use these thresholds in your negotiation?

A regulatory cap is not only a constraint on banks; it is a lever for you, under three conditions.

Know first the exact category of your credit. Total duration draws the border; financing over six years falls into medium-term credit, and beyond seven years the long-term regime applies. Ask for the written classification retained by the bank, since it determines the applicable threshold.

Compare second the TEG of your offer against the right threshold, not the average rate. The average describes the market; the threshold marks the legal limit. A TEG close to the cap remains lawful, but it places your file in the high bracket of the market, and that alone justifies a question asked out loud.

Anticipate finally the side effect of the new rule. With a margin halved, a bank can no longer freely fold a high risk premium into its rate. In our experience this translates less into blunt refusals than into stiffer demands on guarantees and on the solidity of the forecast. Your best shield against a TEG brushing the threshold remains a file that inspires confidence.

FAQ — Frequently asked questions

Usury rate versus excessive rate: what difference?

Why are the caps falling in the second half of 2026?

Do these caps concern companies as much as individuals?

What should I do if an offer shows a TEG above the cap?

When will the next caps be published?

Sources and references

Note No. 01-2026 of 30 June 2026 on the excessive interest rate thresholds applicable for the second half of 2026 — full table of H1 averages and H2 thresholds per category — Banque d'Algérie, Direction Générale du Crédit et de la Réglementation Bancaire · Verified on 22/08/2026
Instruction No. 06-2026 of 29 June 2026 amending instruction No. 08-2016 of 1 September 2016 — article 2: tolerated overrun brought from 10% to 5% of the average effective rate — Banque d'Algérie · Verified on 22/08/2026
Note No. 02-2023 on the excessive interest rate thresholds applicable for the first half of 2024 — illustration of the semester method per facility category — Banque d'Algérie, Direction Générale du Crédit et de la Réglementation Bancaire · Verified on 22/08/2026