Press Release from 2020-12-04 / Group, KfW Development Bank
Kicking off the German-Moroccan reform partnership: an economic model to benefit many Moroccans
- „Compact with Africa“: KfW provides support to Morocco totalling EUR 250 million
- Strengthening capital markets and the private sector
- Stabilising the Moroccan financial system
On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), KfW Development Bank has signed a financing agreement with the Moroccan Ministry of Economy and Finance totalling EUR 250 million for a low-interest loan. This is about improving the conditions for investment and access to financial services for domestic and foreign small and medium-sized private sector companies. The intention is to achieve this through a variety of reform measures: for example, mobile banking will be expanded in Morocco so that some payments can be processed using mobile phones. Assistance will also be provided to bolster the microfinance sector to make it easier for microenterprises to obtain a loan. The capital market is being developed to make it simpler for companies to refinance using bonds. Stabilisation of the financial system also has a role to play. One example of this is strengthening the deposit guarantee system in Morocco.
The financed reform programme is linked to the “Compact with Africa” initiative, which was agreed in 2017 during the German presidency of the G20 to support reform efforts in six African countries.
“Creating better conditions for investment has an enormous impact, and will strengthen the long term economic and employment growth in Morocco for. enabling the private sector to achieve its full potential is the key to Morocco’s continued economic development is. This will lead to improved income and employment prospects for large sections of Morocco’s population”, said Dr Günther Bräunig, Chief Executive Officer of KfW.
The economic model that the reform financing aims to achieve should benefit all levels of society and every region. The offering should improve conditions in the microfinance sector in particular, thanks to the removal of regulatory and legal barriers. This makes financial services more easily accessible – including remotely – and more attractively priced for small and medium-sized enterprises, start-ups and the local population.
The current number of rural population with access to financial services should double to 75 % by 2030.
Small and medium-sized companies are an important driver of the Moroccan economy because they make up over 90 % of the companies in the private sector and employ over 60 % of the labour force.