Morocco - microfinance - Al Amana - 2008

Contribute to develop microfinance institution

 

Beginning: 2008
Financing: Guarantee of a 100 M dirhams subordinated loan
Partner : Al Amana
 
Context
 
In 2005, almost 80% of the world’s population had no access to financial institutions. Microfinance institutions provide financial services to people who would otherwise be deprived of them because of their meagre resources. They also aim to promote the development of revenue-generating activities.
By the end of 2006, in Morocco, nearly one million people, of whom 66% were women, had benefited from such services, thereby increasing their incomes and the standard of living of their families. The results of Moroccan microfinance institutions in tackling poverty have been an important source of support for many people.
Al Amana is one of the most important microfinance associations in Morocco. Since its establishment in 1997, it has granted 1.5 million loans for a total amount of 6.7 billion dirhams (610 million euros).
In anticipation of substantial growth in their credit activity in 2007, and in order to be in a position to meet the strong demand for microfinance services in Morocco, the association solicited help from PROPARCO to strengthen its equity capital.
 
Objectives
 
By supporting Al Amana in the development of its activity, PROPARCO is effectively contributing to the fight against poverty in Morocco, through its promotion and development of micro-enterprises. By offering innovative products, the association is encouraging the development and diversification of the Moroccan financial sector.
 
Description
 
Al Amana is pursuing a policy of product diversification so as to widen the range of microfinance instruments available to its clients. The association intends to develop a rural solidarity micro-credit, as well as individual credits and housing loans. Al Amana’s strategy also focuses on the development of credit specially intended for small and very small businesses.
Although the perception of microfinance institutions by Moroccan banks has improved, and though the banks grant senior loans to the microfinance institutions, no bank has yet been willing to intervene with quasi-equity capital without a guarantee provided by PROPARCO. The loan granted by the Société Générale Marocaine de Banques (SGMB) has allowed the association to increase its equity capital in order to maintain a solid financial structure and to continue to solicit the services of banks and foreign sponsors.
 
Impacts
 
Although the perception of microfinance institutions by Moroccan banks has improved, and though the banks grant senior loans to the microfinance institutions, no bank has yet been willing to intervene with quasi-equity capital without a guarantee provided by PROPARCO. The loan granted by the Société Générale Marocaine de Banques (SGMB) has allowed the association to increase its equity capital in order to maintain a solid financial structure and to continue to solicit the services of banks and foreign sponsors.
 

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