According to a paper published by Mr Xavier Reille of CGAP (Consultative Group to Assist the Poor), “Few countries boasted as strong and as vibrant a microfinance sector than Morocco, where microfinance institutions (MFIs) saw the size of their combined loan portfolio multiply 11 times between 2004 and 2007.” This growth came at the expense of asset quality, however, creating a wave of turmoil in the Moroccan microfinance industry. According to CGAP, in May 2009, one of the four largest microfinance institutions (MFIs) in Morocco, Zakoura, recorded a portfolio-at-risk of over 30 percent.
In collaboration with the Moroccan central bank and the National Federation for Micro Finance Providers (FNAM), the government of Morocco has developed a plan to strengthen the country’s microfinance industry. The four-part plan includes:
• Using a USD 46 million loan from the US government’s Millenium Challenge Account to promote better governance and greater transparency
• Bringing MFIs into a new credit bureau to help control multiple lending and prevent over-indebtedness
• Encouraging partnerships between commercial banks and MFIs
• Conducting a survey to assess ways in which the regulatory framework can be improved
By: Stefanie Rubin, Research Assistant
About CGAP (Consultative Group to Assist the Poor):
Housed at the World Bank Group, CGAP (Consultative Group to Assist the Poor) is an independent policy and research center dedicated to providing financial access for the world’s poor. CGAP is supported by over thirty development agencies and private foundations. Its mission is to provide market intelligence, to promote standards and to offer advisory services to governments, microfinance providers, donors and investors.
About the National Federation for Micro Finance Providers (FNAM):
The National Federation for Micro Finance Providers (FNAM) was created on October 4, 2001 to harness the efforts of different interested parties to organize the Moroccan microcredit sector and also to act as a coordinator and reference for all institutions working in the field. The federation gathers eleven active micro-credit associations of different dimensions at the local, regional and national levels. As of December 2008, the member organizations of FNAM jointly comprised more than 7,000 employees and 1.2 million customers. Fifty-five percent of customers within Morocco’s microcredit sector are women, while beneficiaries in the rural areas account for about 40 percent.
Additional Resources:
Source Article: CGAP: Morocco MFIs Confront Crisis and Strive for a Brighter 2010: http://www2.cgap.org/p/site/c/template.rc/1.26.12505/
MicroCapital Universe: CGAP: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CGAP+%28Consultative+Group+to+Assist+the+Poor%29
Similar Posts:
- SPECIAL REPORT: October 28 is Deadline for MFIs to Apply to Partner with CGAP via “Microfinance Digitization” Community of Practice
- MICROFINANCE PAPER WRAP-UP: “Climate Risk and Financial Inclusion: A Regulatory Perspective on Risks and Opportunities;” by Peter Knaack, Peter Zetterli
- MICROCAPITAL BRIEF: EBRD Loans $21m to BMCI of Morocco as Part of Women in Business (WiB) Program
- MICROFINANCE PAPER WRAP UP: “Women Agents for Financial Inclusion: Exploring the Benefits, Constraints and Potential Solutions,” by Emilio Hernandez et al, Published by CGAP
- MICROCAPITAL BRIEF: Money Transfer Firms Suspend Fees for Payments to Libya, Morocco in Response to Disasters
