Bank Loans in Morocco Increased by 5.8% During COVID-19 Crisis

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Rabat – Bank loans in Morocco recorded a 5.8% increase in the first seven months of 2020, compared to the same period in 2019.

Morocco’s central bank, Bank Al-Maghrib, announced the figure in a recent note on monetary statistics at the end of July 2020.

Loans granted to private companies operating in non-financial sectors recorded the highest increase, with 9.2% between 2019 and 2020. Between July 2018 and 2019, this type of loan recorded an annual increase of 7.7%.

Public non-financial institutions also obtained more loans than ever. In the first seven months of 2020, their loans increased by 6% compared to the same period of 2019. Last year, public non-financial establishments’ loans only grew by 2.7% from 2018.

The overall bank loans granted to organizations in Morocco’s private sector rose by 5.8% between July 2019 and 2020. Between 2018 and 2019, the amount increased by 5%.

Finally, the bank loans granted to households in Morocco increased by 2.1% by July 2020. The figure is similar to the increase recorded between 2018 and 2019.

State-guaranteed loans to face COVID-19

The COVID-19 crisis is one of the main factors behind the significant annual increase in bank loans in Morocco. The measures that the country’s Economic Monitoring Committee implemented also encouraged businesses to take loans.

In May, the committee established a loan guarantee plan that the state treasury financed. The system covers all Moroccan companies, both public and private, that sustained negative impacts due to COVID-19.

Under the plan, businesses can apply for loans to cover their operational costs with a maximum interest rate of 4%. The repayment of the loans can be spread over a period of seven years, with a grace period of two years.

Figures from late May showed that Morocco’s loan guarantee plan, “Damane Oxygene,” helped 17,600 companies avoid bankruptcy. The bank loans amounted to MAD 9.5 billion ($966 million) and benefited businesses operating all over Morocco.

Source: moroccoworldnews.com