Morocco overhauls microfinance regulations with expanded credit limits

Morocco’s microfinance sector faces significant transformation as proposed regulations dramatically increase lending limits and introduce new deposit frameworks,positioning microfinance institutions as crucial intermediaries for small business financing.

The draft decree,implementing Law 50-20 on microfinance,establishes differentiated credit ceilings based on institutional structure and client profiles. For associative microfinance institutions serving low-income populations,limits range from 50,000 dirhams for basic economic activities to 150,000 dirhams for formalized businesses or agricultural ventures,marking a 25 percent increase from previous limits.

The most dramatic change affects microfinance institutions structured as joint-stock companies (IMF-SA). Their lending ceiling jumps sixfold to 1.2 million dirhams,transforming them into vital bridges between traditional microfinance and commercial banking. This positions IMF-SA as essential financing sources for emerging small and medium enterprises previously underserved by conventional banks.

A significant innovation introduces deposit limits for IMF-SA,allowing them to receive up to 10 million dirhams from formal businesses and cooperatives,while individual savings accounts are capped at 400,000 dirhams. This dual credit-deposit capability significantly enhances operational autonomy for small businesses preferring institutions closer to their operational realities than traditional banks.

The regulations incentivize formalization by offering higher credit limits to registered businesses,auto-entrepreneurs,and cooperative members. Informal activities,while excluded from higher IMF-SA credit tiers,gain access to secure deposit services up to 2 million dirhams,reducing dependence on non-banked systems.

Industry observers note these changes acknowledge microfinance sector maturity and segmentation,creating robust frameworks that strengthen financial inclusion while managing risks through differentiated approaches based on institutional capacity and client needs.