The National Federation of Microloan Assocation (FNAM), a Moroccan non-governmental organization (NGO), has called for the need to revise the existing microcredit strategy in Morocco in an effort to make microcredits accessible to more people, according to a press release on Magharebia, the news and information website about the Maghreb region in Africa. In this regard, the FNAM plans to set up a committee that would focus on establishing microcredit associations in those Moroccan regions that are greatest hit by poverty. The term Maghreb is generally applied to the countries of Morocco, Algeria and Tunisia. The Magharebia web site is sponsored by the United States Africa Command, the military command responsible for supporting and enhancing US efforts to promote stability, co-operation and prosperity in the region.
The press release quoted the Chairman of FNAM, Tariq Sijilmassi as saying the FNAM would be flexible and encourage ‘some loosening of ties’ for those organizations which were willing to shift base to regions where microcredit coverage was low. In addition, the FNAM also intends to set up a marketing team to help increase the number of Moroccans who apply for microloans. As per current estimates, 1,250,000 people in Morocco have benefited from microloans so far. Statistics reveal that about 4 million more Moroccans can benefit from microloans.
Mr. Sijilmassi also stressed on the need for more diversification in the suite of products and services offered to the poor. Referencing Asian and Latin American microfinance associations which provide a wide array of services in addition to microloans, the Chairman called for Moroccan microfinance associations to include life insurance products and also flexible medium-term credit solutions for micro-business entrepreneurs who have proved trustworthy. He stressed on the need for microcredit associations to adjust repayments to suit the ‘seasonal nature’ of the recipient’s activities.
FNAM’s idea of diversifying services has been met with mixed reactions by other banking professionals in Morocco. The release quotes an anonymous banker as opining that microcredit associations had to confine themselves only to loans and refrain from entering in competition with the banks. According to a December 2008 report by Magharebia, increased competition among microcredit associations in some regions in Morocco have driven them to branch out from their main purpose of giving microloans. The report stated that some microcredit institutions had also begun issuing consumer loans in order to be profitable. To read more about MicroCapital’s past coverage on the microfinance sector in Morocco, please click here.
FNAM was created on October 4, 2001 to harness the efforts of different interested parties to organize the Moroccan microcredit sector and also to act as a coordinator and reference for all institutions working in the field. The federation gathers eleven active micro-credit associations of different dimensions at the local, regional and national levels. As of December 2008, the member organizations of FNAM jointly comprised of more than 7000 employees and 1.2 million customers. Fifty-five percent of customers within Morocco’s microcredit sector are women, while beneficiaries in the rural areas account for about 40 percent.
The North African Kingdom of Morocco has about 14 percent (p 20) of its population living below the USD 2 per day and 2.5 percent living on less than USD 1.25 per day according to a 2007 estimate by the World Bank. Although this is an improvement from the 24.3 percent and 6.3 percent respectively in 2000, a 2007 report by the United Nations states that Morocco may not be able meet the first of its Millennium Development Goals by 2015 (i.e. reduce, by half, the proportion of population living on less than one dollar a day). The most recent analysis by the United Nations cites ‘insufficient information’ is available about Morocco’s efforts at poverty alleviation.
According to the UN, microfinance is a ‘new phenomenon’ in Morocco. Although the oldest credit delivery programs were initiated in the country in 1993, international experience on how to do microcredit effectively was not introduced within the country until 1995-1996. Approximately since then, the microfinance sector in Morocco has witnessed huge growth, according to a 2007 report by the Organization for Economic Co-operation and Development (OECD), an international organization based in France that helps governments tackle economic, social and governance challenges. A report by USAID reveals that although microfinance laws in Morocco allow (section II.1) for housing credits, they prohibit MFIs from collecting savings.
By Bharathi Ram, Research Assistant
Magharebia News Release
National Federation of Microloan Assocation
United Nations Millennium Development Goals: Morocco
United Nations Capital Development Fund: Countries and Regions – Morocco
Organization for Economic Co-operation and Development – Microfinance in the Rural Areas
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