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A breath of fresh air for microfinance

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The new announcement comes in a context marked by economic gloom and at a time when microcredit associations are investing in the niche of mesofinance.

By Mr. Diao

The announcement made recently by Abdellatif Jouahri, wali of Bank Al-Maghrib (BAM), is good news for Microcredit Associations (AMC), impacted by the coronavirus crisis. As a reminder, the Governor of the Central Bank recently informed the Committee on Finance and Economic Development of the House of Representatives that BAM and the Ministry of Economy, Finance and Administrative Reform are on the close to finalizing the establishment of a guarantee fund for the benefit of micro-credit associations (AMC).

This announcement comes in a context marked by economic gloom and at a time when AMCs are investing in the niche of mesofinance. A branch whose vocation is to provide financing solutions to VSEs and self-employed entrepreneurs who, until then, had more difficulty accessing financing than other categories of businesses.

According to Jouahri, who revealed that a framework agreement creating the fund has been signed by the supervisory ministry and the CCG, the future financial vehicle aims to cover the restructured and additional credits granted as part of the response to the crisis of Covid-19.

Obviously, the future mechanism will give a big boost to AMCs which, like banks and finance companies, have granted extensions of deadlines to their customers. And this, knowing that the crisis linked to the coronavirus has not spared income-generating activities (IGA), a sector in which most AMC customers operate.

The establishment of the guarantee fund is also likely not to dampen the ardor of the AMCs who have bet on mesofinance. This new niche was promoted, in part, in Morocco by the increase in the credit ceiling granted by the AMCs (from 50,000 to 150,000 DH).

In addition, the other salutary measure taken by BAM in favor of the AMCs, faced with an almost total halt in granting and collection activities because of the crisis, is the establishment of a refinancing line for rescheduled loans as well as new loans contracted with banks during the period from the 2nd quarter of 2020 to the last quarter of 2021.

Words from the pro: Youssef Bencheqroun, Managing Director of Al Amana Microfinance

“As far as mesofinance is concerned, Al Amana Microfinance is advanced on the subject. A range of products had already been launched before and during the covid-19 crisis. The range is operational. We have also set up a center dedicated to VSEs in Casablanca. The new premises will be inaugurated shortly. The European Investment Bank (EIB) supports the development of Al Amana Microfinance in the mesofinance niche. The staff is trained and partnerships are forged in order to provide financing and support solutions for VSEs. Our customer portfolio already includes between 4,000 and 5,000 VSEs. Today, entering into a relationship with the TPE revolves around a credit of 30,000 DH against 8,000 DH previously. That said, it is clear that the current crisis has been highly detrimental to both IGAs and VSEs”.

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