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Library » Diagnostic Report on the Legal and Regulatory Environment for Microfinance in Morocco

Diagnostic Report on the Legal and Regulatory Environment for Microfinance in Morocco
Jun 2005, Reille, X. & Lyman, T.R.

How can Morocco help its microcredit associations?

This report describes policy-related obstacles to the development of microfinance in and provides recommendations for interventions in the sector. It outlines the findings of a week-long diagnostic mission by the authors with the assistance of local legal counsel in .

The report:

Provides an overviews of the financial system and a general description of the current state of development of the microfinance sector in ;
Describes the current legal and regulatory environment in the country.

The report finds the following policy-related obstacles to the development of microfinance in :

Decline of fiscal privileges for microcredit associations;
Possible exercise by the Ministry of Finance of its power to set loan pricing caps for microcredit associations;
Lack of legal capacity to mobilize equity from shareholders;
Legal barriers to transformations of successful microcredit associations into commercial companies;
Lack of credit information services industry;
Constraint on foreign investment due to foreign exchange policy;
Inability of banks and finance companies to participate directly in micro-lending due to interest rate caps.

The report concludes with the following recommendations for policy-related activities in :

Transparency-driven regulation of microcredit associations;
Extension of privileges for microcredit associations;
Conditional technical assistance to Federation Nationale des Associations de Microcredit (FNAM);
Credit reference services;
Introduction of amendments to permit transformations of microcredit associations.

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Publisher(s):
CGAP