Impact of Microcredit: Morocco

“At the end of 2009, over 128 million people in the world were receiving microcredit” [http://econ-www.mit.edu/files/6659] This figure reflects the efforts put by different institutions in Latin America, India, Bangladesh, Morocco and many other countries. The program has had a lot of impact on its beneficiaries: reducing poverty, encouraging self-employment and micro- projects and most of all empowering people especially woman as they are the main target client of most microcredit projects. Also, areas such as education and health were also positively impacted by the projects.

In Morocco, “the microcredit sector is the commitment of local banks: Commercial banks are important backers of the industry, having created two of the largest MFIs and funding 85 percent of the sector’s assets in 2008” [http://www.cgap.org/gm/document-1.9.41164/BR_Microfinance_Sector_Morocco.pdf] Al Amana program is considered to be the largest institution providing microcredit services. In the last ten years, Al Amana has been targeting urban, peri-urban and rural areas while expanding to 60 branches. One of the main areas affected by microfinance in Morocco is agriculture. Beneficiaries involved directly or indirectly in agricultural activities have been seeing increase in incomes which has a positive impact on their household consumption, education and health situation. Also, Al Amana program supported the creating of new businesses and the expansion of current activities. Women in rural areas used the money to create small businesses to commercialize products such as: Argan and Olive Oil, handmade carpets and traditional clothes, Rose extracts products… Typically, women would create an association or “Coopérative” with ten to fifteen members and design their activities around a local produce or craft. One of the unique characteristics of unique characteristics of Al Amana operations is the joint liability loan concept. Groups of three to four members would basically share the responsibility of making sure the loan is paid and would act as guarantors for each other. This concept has been very successful in Morocco where people value relationships, groups and commitment as core values for the society. This brings up a good point about how microcredit projects should be customized and adapted depending on the region or country in which they are implemented. Joint liability loans, in this case, might not have succeeded in individualistic environments but were a great hit in Morocco.