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    Loans Granted to Non-Financial Companies In Morocco Dropped In 2021

    Having access to financing is crucial for companies to overcome operational hurdles, and fund expansion operations that would unlock growth potential.

    15 Dec 2022

    Rabat - While already underfunded, companies in Morocco have had a harder time having access to bank loans in 2021 compared to the previous year.

    Excluding the financial sector, other Moroccan companies have locked MAD 1.2 billion ($114 million) in loans in 2021, down from MAD 7.4 billion (702 million) in 2020, according to data from Morocco’s Higher Commission of Planning (HCP), the country’s state-owned economic intelligence center.

    Having access to financing is crucial for companies to overcome operational hurdles, and fund expansion operations that would unlock growth potential.

    The drop in financing allocated for non-financial businesses pre-dates the recent tightening in macroeconomics and presents a major regression amid Morocco’s continuous efforts to boost financing for companies.

    Companies operating in finance escaped this trend. HCP data indicated that finance companies had access to MAD 34.2 billion ($3.2 billion) in loans in 2021, against MAD 38.2 billion ($3.6 billion) the previous year.

    Constrained access to financing is a major challenge facing the growth of Morocco’s Small and Medium-Sized Businesses (SMEs), which constitute the bulk of businesses in the country; 90% of Moroccan companies are currently Small sized, and 9% are medium-sized.

    When attempting to file for financing from banks and other financing institutions, Moroccan businesses often face the need to present “extensive guarantees” that fall beyond their capacity, Morocco’s Central Bank Governer Abdellatif Jouahri said back in February.

    Largely considered sub-prime consumers, SMEs in Morocco are also slammed with higher fees for banking services even at the height of the COVID-induced crisis.

    moroccoworldnews

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