Research & Analysis

The Rise, Fall, and Recovery of the Microfinance Sector in Morocco

Morocco is a recognized microcredit champion, boasting 40 percent of client outreach in the Arab world and host to some of the best performing microfinance institutions (MFIs) in the world. But since 2007, the microcredit sector has been confronting a crisis. There are 12 licensed MFIs in Morocco, serving close to 1 million clients with combined assets of 5.7 billion dirham (US$705 million3) as of December 2008. The industry is heavily concentrated, and the four largest MFIs account for 90 percent of client outreach.

The Moroccan microcredit sector has enjoyed one of the most extraordinary growths seen in the microfinance industry. In just four years, from 2003 to 2007, MFI loan portfolios multiplied 11 times and client outreach by four, according to MIX. This exuberant growth was driven by four leading MFIs—Zakoura, Al-Amana, Fondation des Banques Populaires, and Fondep. These institutions scored remarkably well on all microfinance performance metrics, including scale, depth of outreach, asset quality, and profitability. These impressive results did not go unnoticed, and Al-Amana and Zakoura were awarded several international prizes (including MIX’s world’s best performing MFI and the European prize for microfinance). In 2007, Morocco had one of the most vibrant and successful microfinance sectors in the world.