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DEVELOPMENT DEBATES

DEVELOPMENT DEBATES. Microcredit in Morocco ENSIAS, Rabat March 26, 2002. First projects launched in 1996- creation of the first MFI ’s Microfinance law signed into law in January 2000: Main points MFIs can only work on microcredit or directly related activities

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DEVELOPMENT DEBATES

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  1. DEVELOPMENT DEBATES Microcredit in Morocco ENSIAS, Rabat March 26, 2002 MICROCREDIT IN MOROCCO

  2. First projects launched in 1996- creation of the first MFI ’s Microfinance law signed into law in January 2000: Main points MFIs can only work on microcredit or directly related activities MFIs must present a sustainability program over 5 years Allows the ministry of finance to set specific interest rates Sets the necessity of external audits Sets the necessity of a specific accounting model for MFIs Limitations MFI prohibited from lending to other than productive activities MFIs not allowed to collect savings Policy and regulatory environment:a Good Law MICROCREDIT IN MOROCCO

  3. A young fast growing market Main figures 1 USD = 11,5 DH MICROCREDIT IN MOROCCO

  4. Urban/periurban : 85 % , only 2 MFIs target mainly rural areas. Credit : No services Short term : average of 6 months . economical activities : Law limitation. Narrow scale of operations :500 to 5000 DH Avg 1500. Solidarity group lending: One methodology. A Highly concentrated market MICROCREDIT IN MOROCCO

  5. The structure weaknesses of a young fast Growing sector - Absence of a strategy and a market oriented approach - Lack of adapted management and control structure especially among the small MFIs - Lack of information and management system - Lack of adequate financial management - Lack of supervision and coordination for the sector MICROCREDIT IN MOROCCO

  6. Credit Short term economical activities Urban/periurban 500 to 5000 DH Group-lending The market opportunities • Services • Higher term • Non economical • Rural • Higher range • Individual lending MICROCREDIT IN MOROCCO

  7. Rural : New methodologies for the future(Community banks) Expanding to economical clients :HousingPhoto-voltaic panels Client training:Towards service Moving to individual clients and larger loans Targeting untapped markets MICROCREDIT IN MOROCCO

  8. Institutionnal support Financing Supervision and coordination Better help to the poor needs better matching of their needsNext steps to improve the sector MICROCREDIT IN MOROCCO

  9. Technical assistance to improve management and technology Need special funding Adapted to each MFI Specialized entity ? Institutional support MICROCREDIT IN MOROCCO

  10. Finance structure of MFI : mainly subsidies (Mainly Hassan II fund in 2000 and 2001) Commercial funding liabilities ratio Morocco - All MFI’s 36% Financially self-sufficient MFI’s 68% Source : Microbanking Bulletin - April 2001 Pilot projects in process towards using commercial banks sources. Expanding Financing: Towards banking sources MICROCREDIT IN MOROCCO

  11. Ministry of Finance: finances and “controls” Need of a better analysis and coordination of the fundings. Creation of an independent structure? Improving Financing: Towards better coordination MICROCREDIT IN MOROCCO

  12. New specific accounting model Audit and rating programs : on the way Setting the right information and sharing it Develop a good government skill/knowledge of the rapidly growing sector Create a coordination structure(federation, other,..) Improving the supervisison and a better coordination MICROCREDIT IN MOROCCO

  13. There are poor people who are economically active The important role of Women : 75% of the beneficiaries, better clients than men. The important role of NGO at the origin of the micro-credit There are ways to economically address poverty : but the impact is still not measured and uncertain Microcredit and povertyLessons from the Moroccan experience MICROCREDIT IN MOROCCO

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