Countries & Regions

Country Briefing

Bolstered by large-scale support from both domestic and international actors, the Moroccan microfinance sector has seen impressive growth over the last decade and now accounts for about half of all microfinance clients in the Middle East and North Africa region. Moroccan microfinance has however experienced growing pains, and weathered a ‘crisis’ in 2008 with repayment rates falling dramatically throughout the country. Several initiatives to help the industry recover have since begun, with an emphasis on strengthening the regulatory framework and addressing issues of client over-indebtedness. A detailed explanation of the causes of the Moroccan microfinance crisis and recovery measures being taken can be found throughout the Morocco Country Briefing:

• Overview: Several factors came to a head in 2008, causing the Moroccan microfinance industry to experience a repayment crisis. This has since led to a number of initiatives to strengthen regulatory laws and operational practices throughout the sector.
• Supply & Demand: Morocco is highly concentrated with only 4 MFIs accounting for more than 95% of the country’s gross loan portfolio. The recent crisis has caused MFIs to modify their activities, with a shift away from group lending towards individual lending.
• Funding: Moroccan MFIs benefit from the confidence and support of local financial institutions, allowing them to finance more than 80% of all MFI assets through domestic borrowing.
• Performance: Downturns experienced throughout the sector have caused MFI profitability to fall, with median return on assets dropping to a low of 0.2% in 2009. MFIs have responded by consolidating their activities in an effort to lower operational expenses.

The Réseau de Microfinance Solidaire (RMS), an association of small Moroccan MFIs, is working with its partners to forge stronger ties, but are not on the path of consolidation. Recently proposed regulations have created the possibility for Moroccan MFIs to merge or acquire each other. The planned actions by the RMS (shared best practices, shared MIS, and reduced borrowing costs from Credit Agricole) demonstrate that  the small Moroccan MFIs want to remain independent as opposed to merging with one of the big three in the market (Al Amana, FBPMC, and FONDEP).

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