Moroccan Microloan Sector Revises Strategy

Feb 2009
Casablanca, Morocco, February, 24 2009 - Morocco's microcredit industry seeks to expand its product range and boost loan opportunities in poor areas.

The National Federation of Microcredit Associations (FNAM) is hoping to give a new impetus to its work fighting poverty in Morocco. Microcredit has so far helped over 1,250,000 beneficiaries, for a total outlay of 5.69 billion dirhams. Professionals in the microcredit industry now feel the need to adjust the existing strategy and change the current economic model to reach more people.

"Microcredit – a socially responsible activity whose aim it is to help people leave behind a precarious existence by financing income-generating projects – has made a strong contribution towards reducing poverty levels in Morocco," FNAM Chairman Tariq Sijilmassi told the press Thursday (February 19th) in Casablanca.

The FNAM plans to set up "a committee to plant microcredit associations in those regions where poverty is greatest", Sijilmassi added. "The FNAM will encourage some loosening of ties to support associations which want to leave regions where there is good coverage to set themselves up in regions where coverage is low."

In Morocco, where microcredit is better developed than in other countries in the region, the average loan granted to recipients is no more than 5,000 dirhams. Some microbusiness leaders wanting to boost their activities feel that microcredit associations must offer an appreciable increase in loan amounts and repayment terms.

Abdelkrim Elfiqh, a street vendor of second hand clothing, wants to find permanent premises to carry on his trade. "Only", he told Magharebia, "the association needs to grant him a bigger personal loan over a longer term."

"The interest rate provided by the [microfinance] sector remains high," said Aïcha, a seamstress who has been using microcredit for many years.

The FNAM also intends to constitute a marketing team to help increase the number of microcredit applicants. Statistics show that about 4 million Moroccans could benefit from microloans.

"Such an increase will be possible thanks to a more diverse range of products and services offered to target populations," explained Sijilmassi.

He added that Moroccan microcredit associations, much like Asian or Latin American microfinance associations, "must develop what they have to offer, and include life insurance products, flexible medium-term credit solutions for microbusiness leaders who have proven themselves, all the while adjusting repayments to suit the seasonal nature of the recipients’ activities".

However, other banking professionals are not happy with the idea of diversifying the products the microfinance sector has to offer.

"One should not have one's fingers in all sorts of pies. Microcredit associations should stick to their role of providing microcredit [loans] and not enter in competition with the banks," stated a banker who requested anonymity.

The authorities in charge of microfinancing programmes – the finance ministry and the Al-Maghrib Bank – want to tighten up the rules governing the microcredit sector to avoid any possible financial crises in the sector.

"It is important for the authorities not to be too rigorous, or they might put off the managers of microcredit associations, who are volunteers and campaigners. Their only aim is to alleviate the suffering of the most vulnerable sectors of the population by fighting social inequality, which is still considerable in Morocco," said the heads of Al Amana and Zakoura microcredit associations, who were meeting in Rabat on February 19th.

Source : Magharebia

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