Invented by the Bangladeshi Muhammad Yunus, Nobel Prize in 2006, micro-credit is intended to fight against poverty. It finances a category of economically precarious population, on the basis of income-generating activities. Let us look at the situation in Morocco.
The financing of small amounts with a scattered number of customers, and the resulting follow-up, mobilizes a significant human machine, which justifies high interest rates (which can reach up to 16%). Despite this, micro-credit financing in Morocco has experienced high growth rates in recent years (before the Covid crisis), due to its positive impact on precarious populations.
As part of a ranking in the Arab world, at the end of 2020, outstanding credit in Morocco amounted to 760 million dollars, ranking second behind Egypt. These credits made it possible to finance a population of 710,000 people, or a little less than 10% of the Moroccan working population.
Saïda, a client since 2007 of one of the micro-credit structures in Morocco, “Al Amana”, testifies: ” I make washcloths at home, which I sell in the souks. My means did not allow me to manufacture in quantity. By using the microcredit, I was able to buy more fabrics and materials to make the gloves. My children helped me sell them after school. Today, I manage to make ends meet, providing for the basic needs of me and my children. “.
The example of Saida is common. Tens of thousands of auto-entrepreneurs benefit from these credits allowing them to generate subsistence income. Although they hold ancestral know-how, such as embroidery, basketry, ironwork, carpet making, funding alone does not allow their skills to be properly valued. Take the example of embroidery. The manufacture of a hand-embroidered tablecloth can require up to three weeks of work, therefore a very high added value. However, this added value achieved by using low-end fabrics and an outdated design, does not allow sales at attractive prices. At this level, we are touching the limits of financing by micro-credit. Funding alone is not enough to lift a category of the population out of precariousness, to enter into a situation of prosperity, and no longer only to ensure self-sufficiency.
It should be remembered that Great Britain, during the industrial revolution, had relied, among other things, on its auto-entrepreneurs, scattered throughout the country, to bring out a flourishing textile industry. In Morocco, these entrepreneurs remain anonymous, dispersed. Governmental or private initiatives focus on grouping together in cooperatives, or making premises available to exhibit their production. What would be the possible solutions to supplement the benefits provided by micro-credit?
To do this, it is wise to create public and/or private structures to support these tens of thousands of people, in order to sustain their activities on a profitable basis. This additional support work is necessary to ensure the quality of the products manufactured, and to facilitate their sale through effective distribution channels. This policy aims to adapt artisanal production to the needs of high-income consumers.
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Some initiatives emanating from civil society have given rise to exceptional successes, such as the association “Le Réseau des femmes artisans du Maroc”, which has highlighted the production of craftswomen, while positioning them on target markets. Another innovative initiative came from volunteers who bought kilometers of quality linen, distributed models with “trendy” designs, to nearly 200 microcredit holders identified in microcredit associations, to make compliant tablecloths. market expectations, sold to large companies in the country to make end-of-year gifts, specifying on the greeting card that it is fair trade, payment being made directly to the craftswoman, without no intermediary.
Fouzia, a client of the “Popular Bank Foundation for Micro-Credit (FBPMC)”, benefited from this support. She testifies: Previously, when I made a tablecloth which required me 15 days of work, I could not sell it for more than 800 or 1000 dirhams. The fact of working today on linen with colors and patterns more suited to current tastes, these same tablecloths, which required me the same number of hours of work, I sell them between 3500 and 4000 dirhams. As I work with my daughters and daughters-in-law, thanks to this income, I was able to buy an apartment with additional credit. For the same work, I multiplied my income “.
Accompanying and supervising the beneficiaries to adapt the production to the taste of the buyers, and even for export, is the secret of the success that is lacking in efficient micro-finance. Currently, experiments in e-commerce are flourishing, to complete this support work.
The Covid crisis has put several micro-credit associations in difficulty. They need to be saved. Because behind them hides an untapped gold mine just waiting to be developed.
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For Youssef Bencheqroun, Managing Director of “Al Amana microfinance”, leader in the sector: ” The microfinance sector has always developed, alongside the financing component, an NFS (non-financial services) activity, by devoting human and material resources to it and by forging partnerships. Naturally, this last activity cannot be industrialized as much as the financing activity, but nevertheless concerns, for the sector as a whole, 10 to 15,000 micro-entrepreneurs per year. It is partly housed within the Mohamed VI Center for Solidarity Microfinance dedicated to supporting the sector: training of micro-entrepreneurs, promotion of their production through various events, services to institutions. In absolute terms, all clients disbursed receive basic training when releasing loans, which is in itself an introduction to basic notions of budget and financial education, as well as training on quality, sales, packaging , digital, export, etc. “.
In conclusion, without a real support strategy for micro-entrepreneurs, the death rate of micro-projects will remain excessively high, and those who survive will only survive. A winning strategy must go through a perfect synergy between the public sector, micro-finance associations and civil society, while drawing inspiration from existing models of success, to be generalized.