New CGAP Paper Discusses the Rise, Fall, and Recovery of the Microfinance Sector in Morocco
Reille, X.

As the US credit squeeze snowballed into a global financial crisis two years ago, the worldwide microfinance sector appeared to be well-positioned to ride through the turmoil given years of remarkably strong growth and support from a growing range of investors. According to Xavier Reille “Few countries boasted as strong and as vibrant a microfinance sector than Morocco, where MFIs saw the size of their combined loan portfolio multiply 11 times between 2004 and 2007.” But the last two years have shown that this growth came at the cost of asset quality, which – combined with clients borrowing from multiple MFIs – have spurred write-offs and falling returns.

According to new research by CGAP, MFIs in Morocco have embarked on a path to recovery, aided by timely government support and continued backing from commercial banks that have maintained their credit allocations to the sector. To hasten recovery, Moroccan MFIs are tightening their credit processes, strengthening management, and placing a greater emphasis on loan recovery, including the use of legal action to pursue delinquent borrowers.

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Related Documents:

The Rise, Fall, and Recovery of the Microfinance Sector in Morocco
Examining the crisis in Morocco’s microfinance sector

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