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The Rise, Fall, and Recovery of the Microfinance Sector in Morocco
Dec 2009, Reille, X.
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Examining the crisis in Morocco’s microfinance sector

This paper examines the rise, fall and recovery of Morocco’s microfinance sector.

The Moroccan microcredit sector has enjoyed extraordinary growth. According to MIX data, MFI loan portfolios multiplied 11 times and client outreach by 4 times from 2003 to 2007. In 2007, however, some signs of stress, such as loan delinquency and multiple lending started to emerge. Unprecedented growth had overstretched MFI capacity, translating into lenient credit policies, obsolete management information systems, lack of internal controls, and sub-standard governance.

The response of the Moroccan microfinance sector has been swift and timely. The following measures have been taken by various actors to restore confidence in the sector and build the foundation for a more solid and mature microfinance industry:

Local commercial banks have maintained their credit allocations;
MFIs have slowed down their growth and reduced their balance sheet size;
MFIs have adopted aggressive recovery plans, tightened credit processes, and put together teams dedicated to loan recovery;
Government has moved to strengthen MFIs, control multiple lending, prevent over-indebtedness, secure liquidity for the sector and improve the regulatory framework.

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16 Mar 2010
Microfinance in Morocco: Problems and Challenges

After significant development in the sector since its inception in the mid-nineties to now, in recent years started to suffer from problems and new challenges such as: 2 - Rising interest rates: the proportion of the prevailing interest rates in Morocco by the micro-credit associations, which between 13% and 15%, which is very high compared with the situation socio - economic for the poor, and the social objective of these associations, as this ratio remains higher than applicable Balobnak (ranging between 8% and 9%), which is primarily aimed at profit, so it should reduce this ratio to be in line with the status of the poor and enable them to benefit from the services provided by micro-credit associations. 3 - uneven geographic distribution: Keep the geographical distribution of agencies, micro-credit associations is characterized by unequal between the urban and rural area, most of the centers are concentrated in urban areas, with the knowledge that rural areas need significantly to this type of financial services, it is currently 1.4 million customers, we find only 400 thousand customers of the world areas. Reference: http://themicrofinance.blogspot.com

Rachid AJMAL Morocco

13 Jan 2010
The Rise, Fall, and Recovery of the Microfinance Sector in Morocco


Benjelloun Hanaa Morocco

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Journal Volume/Pages:
4

Publisher(s):
CGAP