Note: The data are provided for informational purposes only and in some cases, the information may be incomplete, not fully accurate or out of date. For more information on how data are compiled, see "A Note About Sources." The date of the last update for each country is marked in the section "Country Indicators." We welcome updates and comments. Click here to write to us.
Morocco
Country Indicators
Information Last Updated
February 2008
Information Compiled by
Nathalie Lozano Blanco, Consultant
Population (Millions)
30.2 [2005]
Population Density (per sq km)
68 [2005]
GNI per capita (US$)
1730 [2005]
GNI per capita (PPP US$)
4360 [2005]
Total Unemployment (% of labor force)
11 [2004]
Employment in Agriculture (% of total employment)
44 [2003]
Gross domestic saving (% of GDP)
17 [2005]
% Population under $2/day (PPP)
14.3 [1999]
Size of informal sector
45% (defined as "employment in non-agricultural informal sector as a percentage of total non-agricultural employment" (Human Development Reports 2007/2008)
Depth of Financial Sector (M2/GDP)
97 [2005]
Exchange rate
1 USD : 7.80010 Dirhams, as of February 15, 2008
Percentage of population with access to banking services
The banked population has been estimated at 25% (as of December, 2006). When saving accounts in postal services companies are included, this rate raises to 38%, with a 4% annual growth projection. 17% hold a debit or a credit card. See EFG-Hermes. Dear but Justifiably So. Morocco Banking. July 09,2007; "Le secteur bancaire au Maroc". Ambassade de France au Maroc - Mission Economique de Rabat. August, 2007, in Le secteur bancaire au Maroc; and A fin 2007, plus d’un Marocain sur quatre aura un compte bancaire
Capitalization of banks, NBFIs, stock market
1) Capitalization of Banks: Sum of stock and retained earnings: DH 18,130,963,000 (USD 2,360,095,674), as of December, 2006. See Balance Sheet of All Banks.
2) Capitalization of stock market: DH 582,076,000,000 (USD 77,439,000,000). See Bank Al-Maghrib. Economic and Financial Indicators, as of December 28,2007.
Ownership structure of banks (and financial institutions if available)
Moroccan regulatory adjustments (in 1993 and 2006) have led to a reorganization and concentration process in the banking sector. BANKS: To date, 17 banks are authorized to operate (in 2001, there were 21 licensed banks). As of 2005, 3 of them (Crédit Populaire du Maroc, Attijariwafa Bank and BCME-BANK) collectively accounted for 52.8% of the commercial
banking sector. Private banks controlled by foreign capital: 29%; State-owned banks: 22%; Private banks controlled by local capital: 49%. The structure of the 7 main banks: 1) The largest bank group is Credit Populaire du Maroc, a group consisting of the Banque Centrale Populaire and its network of Banques Populaires Régionales. These regional banks have traditionally been of a cooperative nature, although Credit Populaire has been reducing or even eliminating its cooperative aspects. Banque Centrale Populaire was privatized in 2004, is 100% locally-owned, and is 45% state-owned. 2) Attijari Wafa Bank (created through a 2004 merger between Banque Commerciale du Maroc and WAFA Group) is controlled by Morrocan holding company ONA and has Spanish and French participation (BSCH with 14.53%, Caja Madrid with 3.43%, and Crédit Agricole with 1.14%). 3) BMCE-BANK, a former public bank, now fully privatized, has a 10% French participation (Crédit Mutuel); 4) Banque Marocaine pour le Commerce et l'Industrie - MCI, has a 65% participation of French BNP-Parisbas; 5) Crédit du Maroc, is 52.7% owned by French group Crédit Lyonnais/Crédit Agricole; 6) Société Générale Marocaine is 51.9% owned by French group Société Générale; 7) Caise de Dépôt et de Gestion, a state-owned savings financial institution (it manages approximately 35% of the Moroccan savings market). OTHER FINANCIAL PLAYERS: 5 specialized financial institutions (many specialized financial institutions tend to convert into traditional financial institutions); and 44 non-bank finance companies (23 consumer finance companies, 9 leasing companies, and 12 which are other forms of specialized non-bank financial institution). See (i) "El Sector Financiero en Marruecos" by the Instituto Español de Comercio Exterior, 2006; (ii) "Diagnostic Report on the Legal and Regulatory Environment for Microfinance in Morocco", 2005; and (iii) "Le secteur bancaire au Maroc". Ambassade de France au Maroc - Mission Economique de Rabat. August, 2007".
Formal and Semi-Formal Sources of Microfinance
REGULATED FINANCIAL INSTITUTIONS PROVIDING SIGNIFICANT MICROFINANCE SERVICES:
1) Licensed Microcredit Associations;
2) Commercial Banks;
3) Cooperatives.
SITUATION CONCERNING FINANCE COMPANIES: As noted in CGAP's 2005 report, "The blurring of the line between consumer finance offered by mainstream finance companies and NGO microlending that is seen in many countries throughout the world is not happening to any significant extent in Morocco. The main reason is that Moroccan finance companies . . . are extremely hard-pressed to maintain their profitability even serving a relatively affluent market with larger loans because the allowable spread between their cost of funds and their income from lending or leasing activities, given applicable pricing caps . . . is insufficient." This situation has not improved since 2005, despite finance companies' efforts. On the contrary, they are not exempted anymore, as other financial institutions are, from certain taxes (VTA for example). As a result of the regulatory framework applicable to each type of institution, the average cost of bank credit in 2006 was 7.08%, compared to 11.53% for credits granted by finance companies. See: CGAP Diagnostic Report on the Legal and Regulatory Environment for Microfinance in Morocco". By Xavier Reille and Timothy R. Lyman. June, 2005, pages 4, 5 and 6; La Gazette du Maroc. "LOA et Crédit Bail: des activités en voie de disparition". February 8, 2007; and Bank Al-Maghrib, Annual Report. June, 2007, pages 75 and 76.
Only licensed Microcredit Associations and regulated financial institutions are authorized to provide microcredit.
Pursuant to a report concerning microlending for housing, main informal sources of credit are: friends (38%), family (38%), colleagues (21%), and money lenders (3%). See "Practical Guide for Housing Microfinance in Morocco". CHF International, 2005
The Law on Microcredit (MCL) defines microcredit as “credits having as their main objective to permit 'economically vulnerable' people to: (i) to create or develop their own business producing goods or services, helping these people succeed economically; (ii) buy, construct, or improve their house; and (iii) add electricity or water facilities to their houses." Microcredits cannot exceed DH 50,000 (approx. USD 6,500). See MCL, Art.2, as amended by Law 58-03
NGO microfinance provider formalization or transformation issues
1) Interest rate caps applicable to regulated institutions would apply to NGOs that transformed, making it difficult to conduct a sustainable operation.
2) Compliance with supervision, reporting, disclosure, and prudential regulation make it costly for the NGOs to transform into regulated financial institutions. See "Al Amana- 10 ans- Stratégie 2011: l'inclusion par la bancarisation de masse, 2007", pages 16 to 19.
Ongoing microfinance policy development status
1) In Morocco, microfinance is virtually solely provided by specialized Microfinance Associations that are duly licensed by the Ministry of Finance. Banks and other financial institutions (finance associations) do not play a significant direct role in the microcredit market. The reason for this situation seems to be the difficulty to operate profitably, due to interest rate caps and loan pricing controls applicable to banks and financial institutions. Banks have established alliances with microcredit associations to access the market indirectly, and in some cases serve as sources of debt financing for those associations. Concerning the cooperative sector, which was mainly represented by the Banques Populaires’ netwok, as noted by the 2005 CGAP Report: “it has experienced a trend toward de-emphasis or termination of its cooperative aspects. For example, the enormous size of the network of 16 regional cooperative banks known as the Banques Populaires, and the strong role played by the centralized apex institution (which has been transformed into a fixed capital limited liability company) tend to minimize the significance of the membership aspect of the retail institutions.”
2) The microfinance sector in Morocco is recognized as one of the leaders in the MENA region. Al-Amana Microcredit Association is the most important organization, not only in Morocco but also throughout the Middle East and North Africa (MENA) region.
3) The microfinance market is highly concentrated: as of 2005, 3 microcredit associations accounted for approximately 80% of the clients (Al Amana, Zakoura, and FBP), and the market is concentrated in urban and peri-urban areas.
4) In the regulatory area, microfinance has a functional legal framework. The 2006 Banking Law has expanded the Central Bank (Al-Maghrib)’s oversight jurisdiction to all financial institutions, including microcredit associations, although the Ministry of Finance has the regulatory and licensing authority over those associations. See "Diagnostic Report on the Legal and Regulatory Environment for Microfinance in Morocco". CGAP, 2005; International Year of Microcredit. Country: Morocco. Final Version, 2005; Forum de la Microfinance; and www.microcreditaumaroc.com.
Safety net availability: insurance, pension, etc.
Social insurance system covers salaried workers and apprentices in industry, commerce, forestry, agricultural cooperatives, and associations. It excludes self-employed persons. The monthly contribution to the social insurance system is 3.96% of monthly earnings. The minimum monthly earnings for contribution purposes are equal to the legal minimum wage: DH 1,183.00 (approx. USD 154) in the agricultural sector, and DH 1,841.84 (approx. USD 239) in the nonagricultural sector. Social security benefits include: (i) old-age pension at age 60, with at least 3,240 days of insurance coverage. The pension is equal to 50% of the insured’s average monthly earnings in the last 96 months plus 1% for every 216 days of insurance exceeding 3,240 days, up to a maximum of 70%; (ii) early pension, which may be paid at age 55 with at least 3,240 days of insurance coverage if the employer agrees to pay the National Social Security Fund an amount equivalent to the value of the pension; (iii) disability and survivor pension; (iv) sickness and maternity cash and medical benefits; (v) work injury; (vi) family allowances: eligible children must be younger than age 12 (or 18 for apprentices, or 21 for students or young female relatives caring for at least two infants in the insured’s household). Family allowances benefits can be up to DH 150 (USD 19) a month for each of the first three children; and DH 36 (USD 4) for each additional child up to the sixth. See: (i) Social Security Programs Throughout the World: Africa, 2007 (Social Security Policy); (ii) Ministry of Employment and Vocational Training (Ministere de l’Emploi et de la Formation Professionnelle), which provides general supervision to the social security system; (iii) National Social Security Fund (La Caisse Nationale de Securitie Sociale), which administers the program; and (iv) National Sickness Insurance Agency (ANAM), which supervises the basic health care system.
General Participation in the Financial Services Market
No. of institutions
No. of clients
Total Assets
Deposits
Target Market
Constraints to provision of microfinance services
Banks
Banks
16. The reduction (in 2001 there were 21 banks) is due to the liberalization of the sector since 1998. See "Le secteur bancaire au Maroc". Ambassade de France au Maroc - Mission Economique de Rabat. August, 2007 (Le secteur bancaire au Maroc).
1,034,162 (as of December, 2006). Women represent 66%. See Fédération Nationale des Associations de Microcrédit, Statistics up to December 31, 2006 in Chiffres au 31 decembre 2006
Total Loan Portfolio: DH 3,545,301,904 (USD 460,207,679.95). See Fédération Nationale des Associations de Microcrédit, Statistics up to December 31, 2006 in Chiffres au 31 decembre 2006
Low-income people in urban, peri-urban, and rural areas.
They are only allowed to provide microcredits, and can not offer savings or insurance services. See MCL, art.10.
General Approach to Regulating
Legal basis for regulating
Definition or description of institution
Regulator(s) and role of regulator(s)
Activity that determines required regulatory status
Banks
Commercial Banks
Law No.34-03 of February, 2006, regulating credit establishments and related organizations [Banking Law]
Traditional commercial banks, entitled to offer full range of commercial banking activities, including savings, loans, and investment services. See Banking Law, Arts. 1, 7 and 11.
1) Bank Al-Maghrib (BAM) is Morocco's Central Bank. It regulates and is responsible for supervising and controlling the financial institutions. BAM has authority over banks, other financial institutions, and microcredit associations. See www.bkam.ma.
2) Credit and Savings National Committee [Conseil National du Crédit et de l'Épargne], composed of representatives of the government and the financial institutions, and of persons recognized for their expertise in the financial and economic areas (appointed by the Prime Minister). The Committee proposes and discusses all subjects relevant to the development of the savings and credit market.
3) Credit Establishments Committee [Comité des Etablissements de Crédit], composed of representatives of BAM, the Ministry of Finance, and the Professional Banking Association [Groupement Professionnel des Banques du Maroc]. Its main function is to give BAM previous favorable opinion to grant specific authorizations to banking institutions (e.g licensing). The Credit Establishments Committee also conducts studies and analysis concerning the activity of the credit establishments and comparable institutions, and with respect to consumer protection. See Banking Law, Arts. 18, 19 and 20; and Law 76-03, as of november 23, 2005, concerning Bank Al-Maghrib, Arts.6,7,8 and 9.
Offering traditional financial services, including receiving deposits from the public. See Banking Law, Arts.1, 7, and 11.
Non-bank Financial Institutions
Microfinance Institutions
The association must have as its sole objective the distribution of micro-credits and is prohibited from taking deposits. (See arts. 1, 3, 6. of MFL.) Thus, organizations that offer other services (such as health care or education) must separate micro-credit into a separate institution.
Cooperatives/Credit Unions
Cooperatives/Credit Unions
Law No. 24-83 of 1984 - Cooperatives Law, as modified up to 1993 (Coop Law).
Cooperative entities that take deposits from their members in order to invest them again through loans or other activities for the benefit of those members. As cooperatives, they are established to promote the common interests of their members, and are ruled by generally accepted cooperative principles. See Coop Law, Arts. 2, 3 and 6.
Rendering of services by the cooperative for the benefit of its members. Cooperatives can render any kind of economic and/or social service to their members. Law does not require them to be financial cooperatives (credit unions) in order to provide financial services. See Coop Law, Art.3
Non-profit institutions
Microcredit Associations (MCAs)
1) 1958 Dahir No. 1-58-376 (Law Regulating Associations) (incorporation).
2) Law No. 18-97, as amended by Law No. 58-03 of 2004 (Microcredit Law or MCL) (licensing).
3) Banking Law, art. 13, and Title IV (supervision)
Associations having as their sole purpose the granting of microcredits. MCAs are only allowed to grant loans and to engage in credit-related activities, such as providing technical assistance to their clients. MCAs must be non-profit associations. See MCL, arts. 1, 3, 6 and 11.
1) Ministry of Finance approves the association's registration as an MCA, with prior favorable opinion from the Microcredit Consultative Council. See MCL, Arts. 5 and 19.
2) Federation of Microcredit Associations is responsible for: (i) establishing a code of ethics for MCAs, which must be submitted to the Ministry of Finance for approval; and (ii) supervising and ensuring compliance with regulations by MCAs.
3) Bank Al-Maghrib supervises and controls MCAs. (See MCL, Arts. 5 and 23); (Banking Law, Title IV); (and for a recent version of the code of ethics of MCAs, see Code de Deontologie).
1) Registry of Commerce [Registre du Commerce] (incorporation).
2) Bank Al-Maghrib, with the previous favorable opinion of the Credit Establishments Committee (licensing). (See Law No. 17-95, Arts. 32 and 33); (Banking Law, Art.27).
Corporation. See Banking Law, Art.28.
1) Any acquisition of "controlling shares" must be previously approved by Bank Al-Maghrib, following the same procedures as those required for one to operate as a financial institution. There is an acquisition of "controlling shares" when: (i) a person or company has a majority voting right in the general assembly; or (ii) a person or company has, directly or indirectly, the power to direct or cause the direction of the management, through the ownership of a majority voting right and/or by contract.
2) The establishment of a local subsidiary or a branch of a foreign financial institution requires the prior approval of the regulatory financial authority of the respective authority in the country of origin. Bank Al-Maghrib can conduct any relevant research to ensure that the regulatory framework of the country of origin does not restrict Bank Al Maghrib’s supervision authority in Morocco.
3) Any shareholder owning, directly or indirectly, 5% or more of the outstanding shares or voting rights must inform Bank Al-Maghrib.
4) The acquisition of 10% or more of the outstanding shares of a credit establishment requires prior consent from Bank Al-Maghrib. See Banking Law, Arts. 27, 32, 36, 66 and 67.
Bank Al-Maghrib has 4 months to approve or reject the application. See Banking Law, Art. 27(4).
Cooperatives/Credit Unions
Cooperatives/Credit Unions
Coop Law, Arts. 7, 8, 9, 10 and 77
Office of Cooperation Development; and Ministry in charge of supervising the activity of the cooperative (e.g. Ministry of Agriculture for agricultural cooperatives). See Coop Law, Arts. 7, 9 and 77.
Cooperative (with a minimum of 7 members' participation). See Coop Law, Arts. 7 and 12.
1) Companies can only be admitted as members if they prove that they have significant activities or interests in the same geographical area as the cooperative.
2) Those who do not have any significant activity in the same geographical area of the cooperative cannot be members. See Coop Law, Arts.13 and 16.
90 days to approve or reject the application, or it is deemed approved. See Coop. Law, Art. 9
Ministry of Finance approves the association’s registration as an MCA, with the previous opinion from the Microfinance Consultative Council. See MCL, Arts. 5 and 19.
Non-profit microcredit associations.
1) Any member of the association owning, directly or indirectly, 5% or more of the contributions or voting rights must inform Bank Al-Maghrib. 2) The acquisition of 10% or more of the contributions of an MCA requires prior approval from Bank Al-Maghrib. See Banking Law, Arts. 27, 32, 36, 66 and 67.
The Ministry of Finance has 6 months to approve or reject the application. See MCL, Art.6.
Licensing Requirements and Standards
Standards for ownership officers
Feasibility study/business plan
Audit of Proposed Founders, Owners, Officers
Operating Manuals
Prohibited sources of funds
Banks
Commercial Banks
1) THE FOLLOWING CANNOT BE FOUNDERS, DIRECTORS, MANAGERS OR LEGAL REPRESENTATIVES OF A CREDIT ESTABLISHMENT: persons (i) having any criminal conviction; (ii) convicted for offences violating the foreign exchange regulation; (iii) convicted of terrorism; (iv) with history of bankruptcy; (v) convicted for rendering financial services without proper authorization from Al-Maghrib; (vi) convicted for false or misleading advertising inducing the public to believe that the institution acts as a credit establishment; (vii) condemned to expulsion from a regulated profession. These rules apply to convictions imposed in Morocco or abroad.
2) FOR THE MANAGING DIRECTOR, THE MEMBERS OF THE BOARD OF DIRECTORS, AND HIGH-RANKING OFFICERS: These officers of a credit establishment that receives funds from the public cannot simultaneously have a similar position in another company, except: (i) financing companies that do not receive deposits from the public; and (ii) companies under the control of the credit establishment.
3) AUDITORS shall present full evidence of their independence. Pursuant to supervision rules, banks must appoint two auditors that are independent of each other. See Banking Law, Arts. 31, 37 and 74; and Circular 27/G/2006.
Business plan and information as to the financial, administrative, and organizational structure, as well as the institution's short- and medium-term plans. See Banking Law, Art. 27.
Bank Al-Maghrib conducts all relevant analysis to confirm the information about and qualifications of shareholders and managers. See Banking Law, Art.27.
Unknown
Unknown
Cooperatives/Credit Unions
Cooperatives/Credit Unions
1) MEMBERS OF THE BOARD OF DIRECTORS must be Moroccan citizens.
2) THE FOLLOWING CANNOT BE MEMBERS OF THE BOARD OF DIRECTORS: persons: (i) who have been "deprived of their civil rights;" (ii) with a history of bankruptcy; (iii) with overdue loans to the cooperative; (iv) with any present or previous activity of a competitive nature vis-à-vis the cooperative’s activities.
3) THE FOLLOWING CANNOT BE MANAGING DIRECTORS OF A COOPERATIVE: (i) any person with present or previous activity of a competitive nature vis-à-vis the cooperative; (ii) a person with a history of bankruptcy; (iii) a person whose spouse and/or relatives carry out activities of a competitive nature vis-à-vis the cooperative in the same geographical area.
4) THE FOLLOWING CANNOT BE AUDITORS: spouses or relatives of a member of the Board of Directors; (ii) persons who receive a salary from the cooperative or any of the members of the Board of Directors; (iii) any person having participated in the management of the cooperative in the two previous years; (iv) their spouses. See Coop. Law, Arts.48, 65 and 76
The proposed by-laws of the cooperatives must include: (i) the geographical area; and (ii) the administrative and management structure. See Coop Law, Art.5
N/A
N/A
Cannot receive deposits from non-members.
Non-profit institutions
Microcredit Associations (MCAs)
1) REQUIREMENTS FOR FOUNDERS, MEMBERS OF THE BOARD OF DIRECTORS, AND HIGH-RANKING OFFICERS: accredited high moral standards; no criminal conviction for economic crimes, or for violations of foreign exchange regulations; no history of bankruptcy. These rules apply to convictions imposed in Morocco or abroad.
2) REQUIREMENTS FOR AUDITORS: must comply with the above-mentioned requirements. Auditors shall also provide clear evidence of their independence. If the MCA appoints two auditors, such auditors must be independent of each other. See MCL, Art.7; and Banking Law, Art.74
Development plan of the MCA must provide details regarding: (i) human and financial resources; (ii) the association's business plan, including: (a) credit activities, and (b) activities to be undertaken in the urban and rural areas, in accordance with the national plan for the economic and social integration of the poorest people; and (iii) financial projections, evidencing the MCA's financial viability for a five-year term. See MCL, Art.6
Unknown
Unknown
Cannot receive deposits from the public. See MCL, Arts.10 and 11
Capital and Reserves
Minimum capital
Minimum capital adequacy/gearing ratios
Forms of capital recognized
Risk-weighting of assets
Loan loss provisioning, write-off
Reserves, Liquidity requirements
Banks
Banks
MINIMUM CAPITAL FOR CREDIT ESTABLISHMENTS THAT RECEIVE DEPOSITS FROM THE PUBLIC: DH 200,000,000 (USD 25,855,159). MINIMUM CAPITAL FOR CREDIT ESTABLISHMENTS THAT DO NOT RECEIVE DEPOSITS FROM THE PUBLIC: DH 100,000,000 (USD 12,927,579). Assets must exceed liabilities by no less than the required minimum capital. See Banking Law, Arts.29 and 30; and Circular 20/G/2006, Arts.1 and 3.
Capital adequacy ratio (CAR) cannot be less than 8% on an individual and consolidated basis. Bank Al-Maghrib can authorize a credit establishment to be exempted from the 8% ratio on an individual basis. Pursuant to Basel II, credit establishments must adopt internal mechanisms to ensure that the CAR meets local and international standards (ICAAP). Bank Al-Maghrib's governor has the authority to impose higher standards upon a particular financial institution, after considering its risk profile. See Banking Law, Arts. 50, 52, and 63; Circular 25/G/2006, Arts. 2 to 8; ICAAP Directive; and Circular 26/G/2006. See also Circular 40/G/2007 concerning internal auditing procedures and standards to ensure compliance with prudential regulation.
CORE CAPITAL [Fonds Propres de Base]: the sum of equity capital, reserves, and non-distributed profits, less unpaid capital and net losses. FIRST LEVEL SUPPLEMENTARY CAPITAL [Fonds Propres Complémentaires de Premier Niveau]: revaluation reserves, special guarantee funds, general provisions, provisions for investments, and indefinite term subordinated debt. SECOND LEVEL SUPPLEMENTARY CAPITAL [Fonds Propres Complémentaires de Deuxième Niveau]: long-term subordinated debt (5 years or more) and capitalized interests. Long-term debt included in the supplementary capital cannot exceed 50% of the Core Capital. MAY BE CONSIDERED ADDITIONAL CAPITAL [Fonds Propres Surcomplémentaires]: non-guaranteed subordinated term debt (2 years or more), and long-term subordinated debt (5 years or more) exceeding 50% of the core capital. See Banking Law, Arts. 50 and 63; and Circular 24/G/2006. See also Circular 40/G/2007 concerning internal auditing procedures and standards to ensure compliance with prudential regulation.
0% for maximum security assets such as deposits, credits to Bank Al-Maghrib or to Central Banks of OECD-member countries, security assets issued or guaranteed by the government or by Central Banks of OECD-member countries; 20% for credits to credit establishments and comparable organizations in Morocco or in OECD-member countries, credits granted to other financial institutions with a term of less than 12 months, security assets issued or guaranteed by other financial institutions; 50% for housing loans; 100% for credits granted to other financial institutions with a term of more than twelve months, and all other assets. See Banking Law, Arts.50 and 63; Circular 25/G/2006, Art. 9; and Circular 26/G/2006. See also Circular 40/G/2007 concerning internal auditing procedures and standards to ensure compliance with prudential regulation.
GENERAL PROVISION: maximum 1.25%. STANDARD [SAINES] (0%): credits guaranteed by deposits or by government guarantees; WATCH [PRÉDOUTEUSES] (20%): credits overdue 90-179 days; credits granted to a debtor whose financial situation cannot be properly analyzed due to lack of information; DOUBTFUL [DOUTEUSES] (50%): credits overdue 180-359 days; non-default credits granted to a debtor whose financial situation has deteriorated; LOSS [COMPROMISES] (100%): credits overdue 360 days or more; credits overdue 9 months or more, if installments are made monthly. See Banking Law, Arts. 50 and 63; Circular 19/G/2002; Modification to Circular 19/G/2002, as of December 2004; and Circular 24/G/2006, Art.17. See also Circular 40/G/2007 concerning internal auditing procedures and standards to ensure compliance with prudential regulation.
Legal reserve: 15% of the credit establishment’s liabilities during the previous month. See Banking Law, Art.128; and D.No.61/G/07, Arts. 2, 3 and 5.
Cooperatives/Credit Unions
Cooperatives/Credit Unions
There is no minimum capital requirement for cooperatives. There is a minimum contribution requirement for each member of DH 100 (USD 13). The capital of the cooperative can be raised or reduced, but it cannot be reduced below an amount equal to 3/4 of the highest capital that the cooperative has had since its creation. See Coop Law, Arts. 25 and 29.
N/A
Paid-up capital. Capital is divided into share certificates. See Coop. Law, Art.25.
N/A
N/A
1) LEGAL RESERVE: at least 10% of annual profits must be set aside for a legal reserve, until the reserve contains an amount equal to the cooperative’s capital.
2) EDUCATIONAL FUND: 2% of annual profits must be set aside for a fund to be used in educational programs for its members. See Coop Law, Art. 69.
Non-profit institutions
Microcredit Associations (MCAs)
N/A
The Ministry of Finance can establish an assets : liabilities ratio. See MCL, Art.16.
N/A
N/A
N/A
N/A
Risk Management Guidelines
Guidelines & restrictions on financial services
Guidelines & restrictions on operational rules
Guidelines & restrictions on interest rates
Concentration of risk
Connected/insider business
Banks
Commercial Banks
1) Must obtain prior authorization from Bank Al-Maghrib to open and close branches and agencies in Morocco and abroad. Bank Al-Maghrib shall obtain prior favorable opinion from the Credit Establishments Commitee.
2) Must give prior notice to Bank Al-Maghrib concerning any modification to their by-laws.
3) Must give prior notice to Bank Al-Maghrib of their annual plan to extend their operations in Morocco and abroad. Bank Al-Maghrib can restrict such program if it considers that the establishment is not complying with prudential regulations.
4) Must report to Bank Al-Maghrib any relevant information to ensure the adequate operation of the Credit Bureaus.
5) Must give their clients at least two months' notice of the closing of any branch.
6) Morocco has recently issued Law 43-05 of 2007, concerning anti-money laundering, which follows international standards, specificaly the Recommendations issued by the OECD's Financial Action Task Force (FATF). Pursuant to the new Law, banks and other financial players must comply with new requirements such as a code of conduct for managers and employees; specific internal auditing procedures; and the obligation to report any suspicious or unusual transactions. See Banking Law, Arts.33, 38, 40 and 117; and Law 43-05 of 2007.
Maximum interest rate is established annually by the Ministry of Finance and Bank Al-Maghrib. It is calculated on the basis of the average interest rate applied by credit institutions to consumer loans during the prior twelve months plus 200 basis points. The interest rate includes all commissions and fees. The maximum interest rate for the April 2007-March 2008 period is 14.17%. See Banking Law, Art. 115; Decree of the Ministry of Finance as of September 29, 2006; and Circular 19/G/2006. To see the current interest rate, see Taux Maximum des Interets Conventionnels des Etablissements de Credit
1) Must report on a monthly basis to Bank Al-Maghrib all transactions with a single legal entity or natural person exceeding DH 100,000 (USD 13,059). The report must follow the forms and requirements established in the Instruction concerning centralization of risk information.
2) Must report to Bank Al-Maghrib any credit granted to a single legal entity or natural person exceeding 5% of the bank's capital.
3) Exposure to a single legal entity or natural person cannot exceed 20% of the institution's capital.
4) Acquisitions of 10% or more of the capital or voting rights in another company are controlled as follows: (i) aggregate equity investments in other companies cannot exceed 60% of the bank's net capital and reserves; (ii) investment in a single company cannot exceed 15% of the bank's net capital and reserves; (iii) banks cannot own shares whose value exceeds 30% of the net capital and reserves of the issuing company. Restrictions listed in points (ii) and (iii) are not applicable to acquisition of shares in: (a) other credit establishments; (ii) off-shore banks; or (iii) insurance companies. See Banking Law, Art. 50; Circular 29/G/2006; Instruction concerning the centralization of risk information; Circular 6/G/2003; Circular 57/DCEC/2001; Circular 3/G/2001; Decree 174 of 1997.
Unknown
Banks
PERMITTED: sight and term public deposit-taking; loans; money transfers; means of payment; buying and selling of letters of exchange and currencies; operations with gold and precious metals; issuance and receipt of letters of credit; financial counseling services; investment in other companies. Recently, the commercialization of three "halal" (interest-free) Islamic products has been authorized: (i) Ijarah, a leasing contract between a lending institution and a customer. It can take the form of a simple lease agreement or be accompanied by a contract for the lessee to acquire the asset at the end of a fixed period; (ii) Musharakah, a contract that enables lending institutions to help businesses finance themselves through the sale of stakes in a future or existing company. Both parties are liable for the value of their investment and each gains or loses a previously-agreed share of the profits or losses; and (iii) Murabahah, which enables people to acquire assets without taking out an interest-bearing loan. The bank purchases the asset and then resells it to the customer in installments at an openly stated price, factoring in administrative costs and profit. See Banking Law, Arts. 1, 2, 3, 4, 5, 6, 7, 8, and 9; Circular RN/33/G/2007; and Morocco Week in Review
Non-bank Financial Institutions
Microfinance Institutions
Prohibited: Deposits and savings. (See art. 3 of MFL)
Cooperatives/Credit Unions
Cooperatives/Credit Unions
Unknown
N/A
N/A
Any transaction between the cooperative and any of its managers -- or any company partially or wholly owned by such managers -- must be previously approved by the Board of Directors. See Coop. Law, Art.55
Non-profit institutions
Microcredit Associations (MCAs)
PERMITTED: Granting loans and related services, such as technical assistance and training. PROHIBITED: Receiving deposits from the public. See MCL, arts. 1 and 3.
Each MCA must join a Federation of Microcredit Associations [Fédération Nationale des Associations de MicroCrédit]. Its by-laws must be previously approved by the Ministry of Finance. See MCL, Art. 21 and Forum de la Microfinance
The maximum interest rates can be determined by the Ministry of Finance, but MCAs are not forbidden (as banks are) from charging additional fees. Moreover, to date the Ministry of Finance has not exercised the power to limit interest rates. See MCL, Art. 8.
Microcredit granted to a single person or microenterprise cannot exceed DH 50,000 (USD 6,450). See MCL, Art. 2
Unknown
Reporting and Supervision
Supervision Method
Supervision costs and fees
Disclosure and reporting requirements
Depositor protection mechanisms (e.g., deposit insurance or lender of last resort)
Banks
Commercial Banks
Bank Al-Maghrib supervises administrative and accounting internal organization, internal audit procedures, financial performance, and compliance with prudential regulations. Bank Al-Maghrib can carry out on- or off-site inspections at any time. There is also a Coordination Committee, created in July 2007, which is in charge of establishing the supervision rules (frequency and form). See Banking Law, Title IV, arts. 53, 55, 56, 70; and Decree No.2-06-225 of July 3, 2007.
Unknown
REPORTING: Banks are required to send to Bank Al-Maghrib: (i) DAILY: exchange positions; (ii) WEEKLY: inter-bank lending and borrowing in foreign currencies; (iii) MONTHLY: compulsory ratios; (iv) QUARTERLY: breakdown of deposits and credits; (v) ANNUALY: balance sheets, operating balances, income statements. Annual financial statements must be verified and certified by two auditors. DISCLOSURE: (i) must publish their annual financial statements in a national newspaper; (ii) must publish, at least annually (or quarterly if required by Bank Al-Maghrib), information concerning their capital adequacy ratio and other data concerning prudential requirements; (iii) any document or publication issued by a bank must include: (a) corporate name, (b) legal form of organization, (c) equity capital, (d) address, (e) registration number (from the Registry of Commerce). See Banking Law, Arts. 39, 46, 47, 48 and 49; Circular No. 13/G/99; Circular No. 4/DCEC/99; Circular No. 12/G/2000; and Decree 1440 of 2007. For a complete list of all reports, see Annex to Circular 4/DCEC/99 and Annex to Circular 12/G/2000.
1) A Collective Guarantee Fund insures individual deposits up to DH 80,000 (USD 10,412). Banks must contribute annually to the Fund an amount set by Bank Al-Maghrib of up to 0.25% of the deposits. The current contribution is set at 0.20%. Bank Al-Maghrib has the authority to use the Fund to solve temporary liquidity problems of a credit establishment.
2) The Fund does not cover funds: (i) deposited by other credit establishments; or (ii) deposited by a bank's branches, members of the Board of Directors, or by shareholders having at least 5% of the voting rights. See Banking Law, Arts.105 to 111; and Circular 22/G/2006.
Cooperatives/Credit Unions
Cooperatives/Credit Unions
On-site and off-site supervision by the Office of Cooperation Development. See Coop. Law, Art.79
Unknown
REPORTING: The following must be submitted to the Office of Cooperation Development at least 15 days before the annual general assembly meeting: (i) annual balance sheet; and (ii) management report containing information on reported gains and losses See Coop. Law, Arts.67 and 68
Unknown
Non-profit institutions
Microcredit Associations (MCAs)
Bank Al-Maghrib supervises administrative and accounting internal organization, internal audit procedures, financial performance, and compliance with prudential regulations. Bank Al-Maghrib can carry out on- or off-site inspections at any time. There is also a Coordination Committee, created in July 2007, which is in charge of establishing the supervision rules (frequency and form). See Banking Law, Title IV, arts. 53, 55, 56, 70; Decree No.2-06-225 of July 3,2007; and Decree 31-07 of 2007.
N/A
New disclosure regulations were enacted in January 2008. More detailed information will be posted here when available.
Tax Treatment
Taxes on Income
Taxes on Transactions
Other
General Applicability
General Applicability
1) CORPORATE INCOME TAX: 35%. Resident and non-resident companies pay tax only on Moroccan-source income. For credit establishments, a 39.6% rate applies. Profits remitted abroad by foreign companies are subject to a 10% branch profits tax.
2) INDIVIDUAL TAX: progressive rates to 44%.
3) CAPITAL GAINS: generally taxed as income. Foreign companies and individuals selling shares not listed on the stock exchange generally must submit a tax return and pay the tax due within a month after the sale.
4) WITHHOLDING TAXES: Dividends, interest, royalties, and other services remuneration: 10%. See Deloitte Snapshot, November 2006.
OTHER TAXES: registration duty, stamp duty, tax on insurance contracts, tax for professional training, tax on undeveloped urban land, business tax, urban tax, municipal tax, hotel taxes. See Deloitte Snapshot, November 2006.
MFI-specific
Microcredit Associations (MCA)
1) CORPORATE INCOME TAX: 35%. Resident and non-resident companies pay tax only on Moroccan-source income. For credit establishments, a 39.6% rate applies. Profits remitted abroad by foreign companies are subject to a 10% branch profits tax.
2) INDIVIDUAL TAX: progressive rates to 44%.
3) CAPITAL GAINS: generally taxed as income. Foreign companies and individuals selling shares not listed on the stock exchange generally must submit a tax return and pay the tax due within a month after the sale.
4) WITHHOLDING TAXES: Dividends, interest, royalties, and other services remuneration: 10%. See Deloitte Snapshot, November 2006.
Credit operations of MCAs are exempted from the value-added tax for a five-year term after becoming registered by the Ministry of Finance. See MCL, Arts. 17 and 18.
OTHER MCA TAX BENEFITS FOR THE FIRST FIVE YEARS AFTER BECOMING REGISTERED: (i) Donations (in cash or in kind) to MCAs receive favorable tax treatment; and (ii) Equipment and materials purchased from abroad to support microcredit activities receive favorable tax and customs treatment. See MCL, Arts.17 and 18.
Cooperatives/Credit Unions
1) COOPERATIVES HAVING A TURNOVER NOT EXCEEDING DH 5,000,000 (USD 647,194) are exempted from corporate income tax. 2) COOPERATIVES HAVING A TURNOVER EXCEEDING DH 5,000,000 (USD 543,000) are subject to the general rate of 35% corporate income tax. 3) ALL COOPERATIVES receive special tax treatment. They are exempted from other taxes (taxes on the benefits distributed to their members, on professional services, and on services rendered to their members). These exemptions do not apply to the Banques Populaires. See Coop. Law, Arts. 87, 88 and 88 (bis); Fiscal Treatment, 2007; and Impôt sur les sociétés : Des recettes de 29,4 milliards DH en 2008
1) COOPERATIVES HAVING A TURNOVER NOT EXCEEDING DH 5,000,000 (USD 647,194) are exempted from VAT requirements.
2) COOPERATIVES HAVING A TURNOVER EXCEEDING DH 5,000,000 are subject to the 20%/10% VAT requirements. See Coop. Law, Arts. 87, 88 and 88 (bis); Fiscal Treatment, 2007; and Impôt sur les sociétés : Des recettes de 29,4 milliards DH en 2008
Other Relevant Business Legislation
Debt Enforcement and Collection
Competition/Consumer protection rules: standard disclosure formats
Banks
Commercial Banks
Facilities without a fixed time-limit (current account advances, revolving credits, etc.) granted by credit institutions to their customers can be reduced or interrupted only upon written notification and on expiry of a period of notice agreed in the loan contract. (See Art. 63 of 1993 Banking Law).
General Applicability
Commercial Banks
According to the World Bank, it takes, on average, 40 procedures and 615 days from the time that a plaintiff files a lawsuit for overdue debt until (s)he is actually compensated. See Doing Business -- Morocco (Doing Business: Morocco).
