In this paper, we proposed a new hearing aid algorithm to improve SNR(signal to noise ratio) of noisy speech signal and speech perception. The proposed hearing aid algorithm is a multi-band loudness compensation based independent component analysis (ICA). The proposed algorithm was compared with a conventional spectral subtraction algorithm on behind-the-ear type hearing aid. The proposed algorithm successfully separated a target speech signal from background noise and from a mixture of the speech signals. The algorithms were compared each other by means of SNR. The average improvement of SNR by ICA based algorithm was 16.64dB, whereas spectral subtraction algorithm was 8.67dB. From the clinical tests, we concluded that our proposed algorithm would help hearing aid user to hear clearly a target speech in noisy conditions.