Forward by Xavier Reille
Manager of Financial Institution Group Advisory Services in Europe, Middle East, and North Africa
Since its remarkable rise and hard fall in 2008-09, much has been written about the microfinance sector in Morocco. As memories of what is often regarded as the Moroccan microfinance crisis recede, this report takes a look at how the sector has evolved since then. Using case studies from the three leading MFIs in Morocco – Al Amana, Fondation Banque Populaire (Attawfiq), and FONDEP – as well as a wealth of data from other sources, we seek to capture the lessons that can be learned from this experience. It is also an opportunity to deepen the understanding of how the crisis evolved and look ahead to future challenges and opportunities faced by the sector.
Morocco is regularly included in the pantheon of microfinance crisis markets – Bosnia, Nicaragua, and Andhra Pradesh – which together had a major negative impact on the sector’s reputation. However, the crisis in Morocco was both less severe and shorter than the markets to which it is often compared. Indeed, the most severe period of the crisis lasted just one year and the sector had stabilized by 2011.
This is not to minimize the impact the crisis, let alone to argue over its existence. The years leading up to 2008 featured most of the hallmarks of pre-crisis markets: rapid growth, aggressive competition, poor lending discipline, accompanied by poor governance, and lax controls. On the other hand, the level of multiple borrowing was well below that of the most heated markets, and overall microfinance penetration remained moderate. Moreover, the Moroccan crisis was defined by the crisis of one institution – Zakoura – without which the microfinance crisis in Morocco looks far less serious.