Morocco announced on Wednesday 29 January that it was launching a major plan to help create small businesses, encouraging projects led by young people and with low-interest loans favoring rural areas.
Intended to create jobs by encouraging the spirit of enterprise, this plan carried by the State and by the banks plans to cap at 1.75% the interest rate of credits for beneficiaries in rural areas and at 2% in urban areas, that is to say “the lowest rate ever applied in Morocco”, according to a joint press release of the Ministry of the Economy and the central bank Bank Al-Maghrib.
This “integrated program of support and financing for businesses” is expected to create 27,000 jobs annually, by supporting 13,500 new businesses each year. It is based on a special fund with a budget of 8 billion Dirhams (750 million Euros) over three years, including six billion co-financed by the State and the banking sector and two billion from the Hassan II sovereign fund.
“This exceptional effort aims to reduce territorial disparities” in line with the “strategic axes” defined by King Mohammed VI, Finance Minister Mohamed Benchaaboun told AFP. The aim is to encourage entrepreneurship by supporting very small, small and medium enterprises (SMEs), innovative companies and young people. The aim is also to promote the economic and professional integration of workers in the informal sector, according to the same source.
At the start of the parliamentary term, the King had called on Moroccan banks to “join in the development effort” of the country, by supporting young people, who are badly affected by unemployment, as well as small and medium-sized enterprises. It is necessary to correct the “negative perception” of those who see the banking sector “as an organization seeking only immediate profit and without risk,” he said.
The 56-year-old sovereign has called in recent years for a new development model for his country, marked by deep social inequalities. The support plan emphasizes the need to offer simple and accessible banking channels, with short response times and project support procedures. The 1.75% ceiling on the rate reserved for the rural world despite a “higher credit risk” is intended to “encourage the faster emergence of a rural middle class”, according to the official statement.
Discussions are under way to associate various international institutions, such as the World Bank, the European Bank for Reconstruction and Development (EBRD) or the French Development Agency (AFD), with the guarantee mechanisms, according to information obtained by AFP from the Moroccan ministry of the economy.