MICROFINANCE PUBLICATION ROUND-UP: Morocco’s Microfinance Market; Trends in Funding Financial Inclusion; Growth Projections in Islamic Microfinance

morocco microfinance

“Ending the Microfinance Crisis in Morocco: Acting early, acting right;” published by the International Financial Corporation in partnership with the Canadian Department of Foreign Affairs, Trade, and Development; the Danish International Development Agency; Japan; Switzerland’s State Secretariat for Economic Affairs; and UKaid; October 2014; available at http://www.ifc.org/wps/wcm/connect/5e1e5a0047850bdba0d4f5299ede9589/IFC+Morocco+MicroFinance+Crisis+report.English.pdf?MOD=AJPERES

This study assesses how Morocco’s microfinance market has evolved since its 2009 downturn, which the authors argue was caused by rapid growth, aggressive competition, poor lending discipline, poor governance and lax regulatory controls. According to the report, the market stabilized by 2011, making for a relatively short and mild episode compared with others, such as occurred in Bosnia, Nicaragua and the Indian state of Andhra Pradesh. In Morocco, the deployment of a credit bureau allowed MFIs to reduce multiple borrowing, which stabilized the performance of “low-risk” loans, those with small amounts and short terms. MFIs began focusing their efforts on longer-term institutional development, a change that was aided by USD 15 million in technical assistance provided between 2011 and 2012 by the US and Moroccan governments. This support “differ[ed] from the rest of the ‘crisis pantheon’,” serving as a stabilizing force. In closing, the authors conclude that Morocco’s microfinance sector emerged stronger than it was before the crisis.

“Spotlight on International Funders’ Commitments to Financial Inclusion;” by Estelle Lahaye, Edlira Dashi, Eda Dolke and Matthew Soursourian; published by CGAP (Consultative Group to Assist the Poor); 2015; 4 pages; available at http://www.cgap.org/sites/default/files/Brief-Spotlight-on-International-Funders%27-Commitments-to-Financial-Inclusion-Mar-2015%20.pdf

According to this report, funders committed a total of USD 31 billion to financial inclusion efforts in 2013, representing a 7-percent increase from 2011. 75-percent of this amount came from public funders. By region, Eastern Europe and Central Asia (USD 6.2 billion) and South Asia (USD 3.7 billion) continue to receive the most

funding. The largest number of financial inclusion projects for one region, however, was in Sub-Saharan Africa: 788 out of 3,128 projects worldwide. Excluding financial projects, 1,387 were to enhance financial service providers’ capacity, the majority of which supported product development (371 projects) and improving operations (351 projects).

“Global Islamic Microfinance Market 2014-2018,” published by TechNavio, 2014, 70 pages, http://www.technavio.com/report/global-islamic-microfinance-market-2014-2018

This report focuses on Islamic microfinance, whereby services are provided in a manner consistent with Islamic law, which does not allow conventional interest charges. The report divides the sub-sector into segments by product type, such as murabaha (cost of loan plus markup) and mudaraba (trustee financing). The report also analyzes market landscapes and forecasts growth prospects across East Asia and Pacific, the Middle East and North Africa, and South Asia. For the period 2013 through 2018, TechNavio forecasts a cumulative growth rate of 19.7 percent in the global Islamic microfinance market.

By Mathew Cerf, Research Associate

Additional Sources and Resources

[1] “Ending the Microfinance Crisis in Morocco: Acting early, acting right;” published by the International Financial Corporation in partnership with the Canadian Department of Foreign Affairs, Trade, and Development; the Danish International Development Agency; Japan; Switzerland’s State Secretariat for Economic Affairs; and UKaid; October 2014; available at http://www.ifc.org/wps/wcm/connect/5e1e5a0047850bdba0d4f5299ede9589/IFC+Morocco+MicroFinance+Crisis+report.English.pdf?MOD=AJPERES

[2] “Spotlight on International Funders’ Commitments to Financial Inclusion;” by Estelle Lahaye, Edlira Dashi, Eda Dolke and Matthew Soursourian; published by CGAP (Consultative Group to Assist the Poor); 2015; 4 pages; available at http://www.cgap.org/sites/default/files/Brief-Spotlight-on-International-Funders%27-Commitments-to-Financial-Inclusion-Mar-2015%20.pdf

[3] “Global Islamic Microfinance Market 2014-2018,” published by TechNavio, 2014, 70 pages COMMA http://www.technavio.com/report/global-islamic-microfinance-market-2014-2018

[4] CGAP, “Why Has Islamic Microfinance Not Reached Scale Yet?” March 2011

Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at http://www.microcapital.org/products-pages/

Source: www.microcapital.org

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