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Microcredit. What will change with the new law

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Bill 50-20 relating to microcredit was recently passed in the House of Representatives. Here’s what you need to know about what’s new.

Good news for the microfinance sector in Morocco. Bill 50-20 relating to microcredit was recently passed in the House of Representatives. This is a bill, which is part of the continued integration of microcredit into the financial system and the improvement of its governance, and aims to broaden the scope of activity of institutions of microfinance. In addition to the granting of microcredits, this expansion also concerns the collection of deposits and microinsurance operations, in accordance with the regulations in force. Thus, the adopted text defines microcredit establishments as being “any legal person carrying out microcredit activities in favor of people with limited income with the aim of creating or developing production or service activities, or income-generating activities. and job creators.

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Among the new features, we note the possibility of creating these establishments according to two legal statuses. The first being an association assimilated to a credit institution and the second, a joint-stock company assimilated to a credit institution. It should also be noted that under this bill, the ceiling for microcredits will be set by decree, depending on the category, objectives and financial resources of each institution. It should be noted that the new regulatory framework raises the ceiling for loans to 150,000 DH against the current 50,000 DH. “It is true that microcredit has played an important role in job creation, often informal employment, but also in the multiplication of small cooperative societies”, reacts Omar Kettani, Economist and professor at the Mohammed V University of Rabat. However, he deplores an important point according to him.

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“Unfortunately, this draft law on microcredit makes no mention of Islamic microcredit, despite the fact that we have a team of international Moroccan experts in the field, who are recognized by international organizations and in particular by the Islamic Bank of development, and who have already carried out major microcredit projects in Ghaza, Palestine, Tunisia and in African countries with success,” remarks Omar Kettani. “It would be recommended that the new law be able to fix, for conventional or participatory Moroccan banks, the obligation that a percentage of their loans finance microcredit projects”, continues the expert. As a reminder, at the end of December 2020, this sector granted 8.05 billion DH in loans. In total, there are 880,000 beneficiaries, 50% of whom are women.





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