Morocco’s central bank said the number of unpaid loans in the country had doubled over the past decade, despite steady growth in giving out loans the past five years.
Bank Al Maghrib Governor Abdellatif Jouahri said unpaid loans since 2009 totalled 70 billion dirhams ($7.3 billion), about 7.7% of total loans, Morocco’s official news agency MAP reported.
The process of collecting unpaid loans in Morocco is difficult because current laws do not provide a quick solution to the problem. Jouahri said authorities needed to allocate $5.7 billion to the country’s financial system because of the loan crisis.
There are 24 banking institutions in Morocco, five of which are cooperative banks operating in accordance with Islamic law
Official data indicate that bank loans in Morocco increased 10.9% in the past year to $100 billion. Jouahri said the level of loans granted in 2019 was twice that recorded in 2014 and was about 88% of GDP.
What the figures reflect is the economic difficulty Moroccan families face despite the government reforms to boost growth.
The Moroccan High Commission for Planning said in January that Moroccan families were generally dissatisfied with economic conditions, the cost of living and the quality of public services. Several Moroccan and foreign reports warned last year of the growing social inequalities, especially for young people.
Moroccan King Mohammed VI in December appointed a committee to formulate a development model that reduces the inequalities. Committee members have met with political parties and unions to gather views on a new development model, which is expected to be announced in June.
A report by Oxfam last year ranked Morocco among the most socially divided countries in North Africa. It said about 1.6 million people, out of a population of 35 million, suffer from poverty.
Rabat expects a growth rate of 3.5% in 2020, a significant increase over the 2.7% in 2019. The World Bank estimated that Morocco’s economy will achieve 3.6% growth in 2021 and 3.8% over the year after.
However, the drought in North Africa may have repercussions for sectors such as agriculture, while the growth of exports may help to achieve a relative balance.
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