Moroccan microloan sector revises strategy
2009-02-24
Morocco's microcredit industry seeks to expand its product range and boost loan opportunities in poor areas.
By Hassan Benmehdi for Magharebia in Casablanca – 24/02/09
 [File] Morocco's microfinance sector wants to reach more people, says FNAM Chairman Tariq Sijilmassi. |
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.
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abdo Posted 2009-02-25
Can microloans be supported financially either by interest rate or partnership with ambitious youth outside Morocco in neighbouring countries such as Tunisia, Algeria, Senegal or any African Nation and other non-Moroccan nationalities but which love Morocco? What to do then if this is possible? Thank you.
acharif moulay abdellah bouskraoui Posted 2009-02-25
Morocco aims to encourage small businesses to overcome all their difficulties and to be ready for all suggestions for success. We are a country on the move and the only thing that interests us is the happiness of the Moroccans. Such are the directives of His Majesty Mohamed VI, may God help him. –Signed, Acharif Moulay Abdellah Bouskraoui
مراد Posted 2009-02-27
Microloans are a scourge which should be fought and substituted by big loans which operate businesses in a serious way. As to microloans, they are useless. Their amount is merely 5,000 dirhams why is it not 500,000 dirhams over a longer period? By the way, I am a former customer of these loans and there is no hope about these loans except bankruptcy. I swore never to repeat that experience. I gained it nothing from it except my bankruptcy. I hope that necessary funds will be provided for development. As to banks, they are hopeless as they require incredible guarantees. Isn’t the individual a guarantee? I have a dream which I hope to be taken into consideration. I hope that there will be a life long loan for example granting loans for 10, 20, 30 years so that the individual can reimburse it whenever he wants if his business succeeds. However if the project doesn’t succeed, the financial situation of the beneficiary should be taken into consideration and offer him the opportunity to reimburse in monthly instalments at ease or by contracting an insurance for the loan. In that case there will be solutions to providing job opportunities. However, they should be granted only to business owners and people who have projects which were set up over five years, for experience and qualification to employ new workers in order to ensure reimbursement, development and job offers.
BMoh/MAROC Posted 2009-03-06
Microloans!?! Macroloans!?! So long as we do not establish very clear, serious and comprehensive terms to truly facilitate investment in Morocco and so long as we do not manage to get a handle on the abuses of the Ministry of Finance’s officials, then all investment policies are doomed to fail. Pure and simple, the pretty theories will remain just that – theories, long from a business reality. Ask the opinion of people who committed the blunder of believing the state’s promises and who ventured to invest. You will be informed... and very disappointed.
Sarah Posted 2009-06-04
Microcredit plays a very specific role, and it is important that it stays that way. There is no business that will grant you something on the order of 500 thousand dirhams. (The banks are there to meet financial needs of this order.) Nor does this come from the state's will. The institutions giving microcredit loans are organisation (at least for now) and their goals are not just granting money, but also help entrepreneurship and offering access to a bit of economic and social ease for people with weak incomes. This is not a miracle solution for anyone, but, rather, it is a form of aid for those whom a bit of financial help would permit to improve their daily lives. This has unfortunately not always been taken into account by loan officer, who have large economic constraints imposed on them by their workplace, which has a tendency to distance microcredit from its "social" work.
fatima ezzahra Posted 2009-11-30
So long as the interest rate remains so very high (25-30%), we can't say that microloans serve to fight against poverty. What we should know is that microloans are one tool among many to fight against poverty. We need cohesion among sustainable human development, transparency, the rule of law and participatory management and governance. Moreover, the microloan sector in Morocco needs an effective tool for control and inspection. This should elaborate on a platform of the circulation of information among all the microloan institutions so as to deal with the situation of the clients. This will ensure that no loans are made to another microloan institution, so as to not turn microloans into a tool of poverty rather than a tool to fight against poverty.
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