How digitalization has catalyzed financial inclusion in Morocco

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Regulatory framework, technological solutions and payment devices. These are the ingredients for the take-off of digitalization so necessary for financial inclusion in Morocco. And mobile payment is undeniably a success factor in reaching the excluded population at a lower cost. These and other ideas were debated by a host of experts, companies and international organizations last week during a new round of monthly conferences organized by Maroc Numeric Cluster on the theme ” Digitization and mobile payment at the service of financial inclusion”.

The wave of digitization has come to give a new rhythm to the process of financial inclusion in Morocco. It has thus set in motion a new dynamic to ensure equitable access to all financial products and services at a lower cost. “Digitalization today is perceived as an accelerator of access to financial services. It is also a promising and solid avenue for overcoming the low penetration of financial services among unbanked populations,” said Sana Tazi, Managing Director of Maroc Numeric Cluster. In a new round of its monthly conferences held last week, this sector group, with more than 10 years of existence and an ecosystem bringing together digital players and support structures for the promotion of innovation, has chosen to theme “Digitalization and mobile payment at the service of financial inclusion”.
In front of more than 150 online participants and a packed house with startups, SMEs, international organizations like the United Nations Development Program (UNDP) and the European Bank for Reconstruction and Development (EBRD) and international groups , the panelists focused on the real levers of this financial inclusion so much sought after by the Kingdom.

And in this process of fighting against cash, payment institutions have been playing a fundamental role for several years: “We are at this phase where we have to create the use, in particular through the dematerialization of flows, but also through the pilots that can be carried out to create an ecosystem of mobile payment acceptance”, underlined Mohammed Benkaddour, general delegate of the Professional Association of Payment Institutions (APEP), bringing together all the companies approved by Bank Al- Maghrib (BAM) to provide payment services.

Payment institutions: the milestone of 10,000 access points exceeded

Banking law 203.12 of December 24, 2014 established the payment institution status which applies to non-banking entities. This same law explains the services that these establishments are able to provide to citizens, in particular fund transfer operations, deposits and withdrawals from a payment account or the new possibility of opening an account with a non- bank and is called a “payment account”. Through this payment account, the person has the possibility of carrying out a certain number of operations, in particular the payment of invoices, remote payment and also the execution of direct debits.

Broadly, operators fall into two segments: primary payment agents and retail payment agents. The average citizen does not make the difference between the two. In this sense, the main payment agent will provide all the services for which a payment institution is mandated or approved by the Central Bank. The retail payment agent is new. “Today, you can make any type of transaction at a branch of a payment institution. There is a great ability to adapt to the need, that is to say that these are financial services that are easy to understand for a citizen and which are easy to use according to the needs of this person”, indicates the general delegate of the APEP.
In these establishments, there are opportunities to deploy related financial activities, in particular foreign exchange, microfinance through the existing synergies between the establishments and the microfinance associations. “We have already passed the milestone of 10,000 access points. The network and the access points are set to grow,” maintains Benkaddour.

3 levels of accounts and a completely free Wallet!

The level 1 account is capped, so the risk is limited. At this time, the KYC (Know Your Client) is limited to the person’s mobile phone number through his phone number backed by his application. The holder has a “Ribé” account on which he can receive up to 200 dirhams.
The level 2 account is capped at 5,000 dirhams. And good news: during the Covid period, there has been relief from the Central Bank, insofar as the user is content to send a digitized version of his CIN.
For level three, a “quick” interview is carried out at the agency. The customer opens an account which is capped at 20,000 dirhams and free of charge. In concrete terms, nothing is charged for the opening of this account, no account maintenance fees are charged either.
In any case, the charges occur at the level of the withdrawal. What pricing for these operations? “These are competitive fees and I will not go into the details of this pricing here, since everyone has their own policy,” says the expert. Finally, it should be noted that the payment account is obviously held by a payment institution and is held in the name of the user or that of the payment service customer.

The EBRD: Financing coupled with technical assistance

The European Bank’s strategy for reconstruction and development in Morocco is based on three axes: green, financial inclusion and digital. In green, for example, the bank supports the transition to a low-carbon green economy, with green finance representing more than 50% of its activity. “This is already the case this year in Morocco in terms of inclusion. We try to promote equal opportunities through access to skills and employment, finance and entrepreneurship and support for women, young people and other disadvantaged communities”, explains Lamiae Derraji, Principal Banker of the EBRD in Morocco.
Moreover, in financial inclusion, two flagship programs will be launched this year in Morocco for women and for young people and digital. Last year, we launched a study on the digitalization of Moroccan SMEs (…), and we concluded that two important areas need to be developed for Moroccan companies: financing coupled with technical assistance. According to a study by PricewaterhouseCoopers, 81% of companies consider the budget, and therefore financing and in particular external financing, as a critical obstacle to their digitization. And the second point, the Deloitte survey showed that 77% of VSEs/SMEs that were questioned show a need for technical assistance to help them digitize.

“Women in Business”: A 10% grant and up to 1 million euros in funding

Launched in 2017 by the EBRD, “Women in Business” is the first inclusive program with a new digital component. This program offers a complete package, financing via partner banks in euros, dollars or dirhams. “We also make local currency, which is a strong point for the EBRD. We have also offered a first loss guarantee which allows banks to build a more flexible dedicated offer, taking into account the constraints that women may have to manage”.

Thanks to this program, some partner banks have allowed a kind of grace period for female clients when they have had a child or when they have had something personal to manage during the life of the loan. “Women in Business” provides a guarantee covering 70% of the loss of each sub-project. Finally, the EBRD offers dual technical assistance. The first benefits the bank, which the EBRD will help to design the product, also to assess the risks of women entrepreneurs through “a credit scoring tool”. The funder also clearly offers technical assistance for women beneficiaries, therefore mentoring, coaching and a tool to help them develop a business plan and identify areas for improving their activity. “We used the funds from the first loss guarantee, which is equivalent to the guarantee that “Tamwilcom” offers, a subsidy of 10% with a maximum cap of 30,000 euros per sub-project. The amount of the project can go up to one million euros”, specifies the panelist.

In terms of eligibility, SMEs are targeted first. “The European Union, which is our donor, has a fairly broad definition of SME. It’s 50 million euros in turnover and 250 employees. The management must be ensured by a woman and all or part of the capital is held by a woman. So what is important for us is that management is the responsibility of women since we really want to have an impact on this target,” explains the EBRD representative.

Youth Business: The EBRD joins forces with “Tamwilcom”
EBRD seals memorandum of understanding with “Tamwilcom”

The EBRD signed a memorandum of understanding with “Tamwilcom” in March 2022. Objective: to encourage non-financial services for these young people as well as for women entrepreneurs. “We have noticed that the partner banks that sign with us on de facto financial inclusion programs couple guarantees from “Tamwilcom” with our offers. We have therefore raised funds from donors from the European Union, in particular to finance this first loss guarantee”, underlines Lamiae Derraji, Principal Banker of the EBRD in Morocco.
In terms of eligibility, it is always SMEs that are targeted. The management must be ensured by a young person, therefore aged under 35 and all or part of the capital is held by a young person. And of course, the company must be private. “In terms of technical assistance, we will try to strengthen the understanding of the youth segment and their needs.”

Technical assistance dedicated to young people under 35

In its efforts, the EBRD wants the Moroccan banker to no longer be a pure banker, but to be able to provide financing and a complete package of advisory services to help the client evolve in his professional activity. “For young entrepreneurs, we still have the Advice Small Business program. A dedicated team is mobilized to offer a great deal of advice. And all this is coupled with training programs. And an important point for young entrepreneurs is that we want these young people to also be trained in basic concepts in terms of entrepreneurial and business skills on subjects in particular of social, operational and environmental sustainability, access financing and of course digital marketing. But the important thing is this social and environmental sustainability, which informs and crosses all our action”, specifies the manager.


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