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Morocco: Economic recovery increases demand for consumer loans

consumer loans

The demand for consumer loans in Morocco has increased due to the economic recovery and the easing of the restrictions imposed due to the pandemic.

Moroccan banks and financial companies have witnessed an active movement on consumer loans in recent months, in a strong indication of the strength of financial activity in Morocco.

Experts expect that economic activity in Morocco will record a better recovery of GDP by the end of 2021, thanks to the movement on banks.

Consumer loans

The gradual recovery of most economic sectors contributed to the financial companies listed on the Moroccan stock exchange benefiting from the recovery in demand for consumer loans during the first half of this year, after the significant decline that occurred last year due to the repercussions of the Coronavirus on the economy.

The pandemic has directly affected the consumer finance sector, which has caused a slowdown in the pace of production, service and industry chains since March 2020.

But it maintained the purchasing power of most workers in the private sector, in addition to public sector employees whose salaries were not affected by the negative repercussions of the health crisis.

Local banks eased the conditions for obtaining housing loans and consumer loans during the second quarter of 2021, so the demand for consumer loans rose while it stabilized with regard to housing loans.

The demand for short-term consumption loans by Moroccan families has increased recently, while the country’s loan market has witnessed a fluctuation in the pace of growth according to the loans granted, while equipment loans are witnessing a decline.

Official figures of the Central Bank of Morocco indicate that the volume of loans in the first seven months of this year amounted to about 961.3 billion dirhams ($107.8 billion), an increase of about 1.6 percent on an annual basis.

Statistics also confirm that the distribution of loans granted to the non-financial sector indicates an increase in treasury facilities by 9.7 percent, after it was at 6.1 percent.

Noticeable height

The Central Bank clarified in a note on the main indicators of monetary statistics for the month of last June that this development reflects an increase in loans granted to families by 5.8 percent.

The semi-annual financial statements of the Salafin Company, a subsidiary of the Bank of Africa Group, revealed a record increase in the level of consumer loans for individuals by about 234 percent during the second quarter of this year, after it settled in the range of 159.3 million dirhams ($17.8 million).

Economist Omar El Kettani stressed that the financial institutions, including companies and banks, have become familiar with the peak periods for loans, so they offer the best offers, compete to lure citizens and offer them many facilities to obtain short-term loans.

It is expected that the months of September and next October will witness a similar increase in the demand for consumer loans so that Moroccan families can provide the needs of school entry, including registration fees, books, school supplies and clothes.

Experts confirm that the cost of entering school in Morocco has risen significantly in recent years, as a child of primary school age may cost the family more than three thousand dirhams ($340) only during the school entry stage.