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Morocco: The microfinance sector undermined by Dame Covid

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The coronavirus pandemic, it is a reality, greatly weakens the economies of countries, whether developing or otherwise. On the front line, microfinance actors who support the activities of (their) most vulnerable clients, hence their importance, are threatened.

Also, for microfinance institutions in Morocco represented by the National Federation of Microcredit Associations (FNAM), the challenge caused by the Covid-19 health crisis is immense. Also, we cannot hide from the president of the FNAM, Ahmed Ghazali, also president of the Al Amana Microfinance association, this warning, not to say, this cry of alarm about the situation that the microfinance sector is going through in this crucial period.

This crisis has revealed both the importance of our sector of activity but also its vulnerability given the specificity of its customers. “, he said in an interview, pointing out that Microfinance Institutions (MFIs) have been heavily impacted by the Covid-19 crisis. ” Our sector is facing a major financial shock that jeopardizes its sustainability “, he further observed. Ghazali, taking up the history of the crisis, indicated that at the start of the confinement, the loan release activity was at a standstill, the recovery rate was very low and all the MFIs were and still are particularly vulnerable. cash flow problems.

A trend that has not changed much since, according to the president of the FNAM. “ this situation has had a deleterious effect on the ability of our customers to preserve their livelihoods “. Then, he recalled that the customers of the sector have benefited from a massive postponement (more than 665,000 microcredit files representing an outstanding amount of 6.2 billion dirhams (MMDH), or 86% of the overall outstanding amount of the sector) , repayments of microcredits on simple request formulated for an average duration of 3 months without interest and without costs, inducing a negative impact on the net income of Microcredit (350 million dirhams of loss of earnings).

The objective is to help customers in difficulty so that income and jobs are not disproportionately affected and avoid business shutdowns. He also specified the importance of the microcredit sector, which allows ” almost a million micro-enterprises, excluded from the traditional financial system, to access quality financial services through a very large capillarity of our network with more than 1,700 fixed branches, including 40% in rural areas and 150 branches mobiles dedicated exclusively to rural and landlocked rural areas “.

These million income-generating activities (IGA) support some 4 million Moroccans and employ hundreds of thousands of employees. The sector is considered one of Morocco’s leading employers with more than 8,500 employees, 50% of whom are women, he said. Referring to the challenges facing the sector, Mr. Ghazali said, “ pin a lot of hope on the bill being finalized “, adding that it is essential to put in place an institutional, competitive and regulatory environment, competitive allowing the various actors of the sector to improve their performance and to contribute effectively to the achievement of the objectives of the strategy of the sector.

We knew that because of the consequences of the health crisis of Dame Covid, the Microfinance sector in Morocco was going through a dark period, these figures allow us to feel the extent of the damage. So we can easily understand this thinly veiled alarm in the face of the almost generalized decline in the indicators of MFIs or Al-Amana, which alone controls more than 40% of market share in terms of loans distributed by the Institutions. Microfinance (MFI) in the country. For these purposes, it would be necessary to support the development of these MFIs which provide savings and credit services to millions of low-income people.



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