Challenges of Low Income Banking in Morocco

The Moroccan financial sector, which showed great resilience in facing the global financial crisis, is undergoing profound movements especially at the Low Income banking level.

Indeed, donwscaling process, certainly long and careful, were initiated by some local banks to better understand the financial behavior of low-income populations, which should eventually lead to a real banking services for these populations.

But banks in this segment must also count with a new entrant and new leader in terms of network density, it is Al Barid Bank, Moroccan Postal Bank. This bank will certainly have big ambitions in terms of credit products, including credit for housing in addition to its role of collector of small savings.

On the other hand, for the microfinance sector, which employs over 6,000 people, the crisis is not yet behind us. After a period of stagnation (2007/2008) sector has experienced a decline in 2009 from 1,250,000 to 924,966 active customers for outstanding loans of less than 5 billion dirhams. The portfolio at risk has stabilized at an average of 5.66% but reached alarming proportions in some small MFIs.

In this phase of downsizing and consolidation of the portfolio, the industry must move forward on two major projects. We must, first, define the strategy and methods of transformation of large MFIs, and the other, set up new role and new business model for small MFIs.

In fact, it is to clearly define the role and place of the microfinance sector in the Moroccan financial system and configured it. The central bank has an important role in defining that vision.
Finally, as part of this reflection to consider the two forgotten the financial market can be a real growth driver. I mean SMEs and cooperatives.

Mohamed Maarouf