Through a survey conducted between September 2020 and February 2021 among 2,082 people, the national federation of consumer associations aims to “understand the phenomenon of indebtedness in Morocco”.
It defines indebtedness as “the effective recourse for the rapid acquisition of a good or a consumer device”.
The results of this survey have enabled FNAC to highlight the behavior of Moroccans vis-à-vis indebtedness and to propose recommendations “so that the consumer is warned, informed and protected”. They were presented at a press conference on Friday, May 28, and compiled in a 40-page report.
According to the FNAC study, the rate of Moroccan household debt is certainly slowing down, but in 2017, it represented 30% off PIB of the country, what “remains very high in comparison with other countries with emerging economies ”.
The main factors of household indebtedness in Morocco are the consumer credit and the home loans, knowing that, according to this study, it is “the formulas and facilities offered by the actors of the financial sector” which encourage consumers “to take loans and micro-credits”.
According to the survey conducted by FNAC, one in 3 households is forced to go into debt or dip into their savings to make ends meet. 25% of those questioned say they have taken out a loan for the purchase of a car, while 19% have used it to equip their home and 17% to finance their children’s education costs.
The least cited reasons (7%) are party funding or medical care.
Almost 30% of borrowers keep less than 25% of their monthly salary
The people questioned are salaried, retired or exercising liberal functions. 67.7% of them have a monthly income above 5,000 DH and 2.4% have a monthly income below 1,000 DH.
More than half (62.5%) pay monthly payments that exceed 30% of their salaries, knowing that a third (29.3%) say keep less than 25% of monthly salary, after repayment of credits. And only 12% say they keep more than 40% of the salary.
Note that according to the FNAC, a person is “legally” considered as over-indebted, when it only remains, after payment of its installments, 35% of his monthly net income.
The age group most affected by the phenomenon of indebtedness is that of 35-45 years which represents more than 79% according to the results of the survey conducted by FNAC.
This indicates, moreover, that more than half (51.9%) are holders ofat least two consumer loans. Knowing that 34.70% say they have two credits and nearly a quarter (23.4%) say they have three.
“The investigation revealed that the more the number of credits subscribed by a person is important, the more this person seeks to take out new credits whatever the conditions”, Specifies FNAC in its report.
In fact, 31% of people who have taken out loans say they have had recourse to to another credit for repay the first.
If 2 in 5 people say they have no trouble repaying their first loan, it should be noted that 4 out of 5 people say they have repayment difficulties. However, recourse to consumer credit is the last option chosen by consumers in the event of the unforeseen. They prefer to dip into their savings or borrow from their relatives before taking out a loan.
The people questioned indicate that “over-indebtedness falls first on people who live beyond their means (32%), then on credit institutions who encourage their customers to take loans recklessly (12%) and generally both at the same time (58%) ”.
According to FNAC “a large part of Moroccans succumb to tempting offers from specialized companies”.
“Credit organizations offer formulas adapted to all social classes, taking advantage of every occasion (Ramadan, summer holidays, back to school and sheep festival). There is no lack of opportunities to communicate about financing offers to Moroccan households ”, indicates the federation.
She believes that “the risk of household debt distress” will only disappear when they understand “that the credit is not a salary supplement but a salary advance. An advance on savings to be set up, the amount of which was used to acquire a useful asset ”.
It also warns against the “serious” risk of over-indebtedness “for the microfinance industry”, since this phenomenon “can accentuate the poverty of its clients and threaten their social position”. It can even “lead to psychological disorders”, among other health problems.
One in 4 borrowers do not know the amount of their monthly payments
Thus, to fight against the phenomenon, the national federation of consumer associations has set up a credit simulator (available on its site: fnacmaroc.org) which allows consumers to measure their debt capacity.
In addition, it proposes to train and inform the population because, the most affected are those whose level of training is low.
“The majority sign credit contracts without understanding the type, rules or extent of their debts. Their limited training prevents them from fully understanding the entire content of the contract. One in 4 borrowers do not know the amount of their monthly repayments, one in 3 does not know its duration and more than 2 out of 3 borrowers have no idea what the interest rate is of their credit ”, indicates the FNAC which estimates that“ the worst ”is that“4 out of 5 debtors have no idea how to calculate interest”.
“The media and the content of information circulating on the market must be regulated as stipulated by law 31.08, whether in terms of false advertising, the display of prices and reimbursement rates or at the level of clauses. credit contracts ”, underlines the FNAC.
“The law must protect the consumer against imbalance between him and the provider of credit services. That is to say, to protect the consumer’s consent by regulating unfair competition, and the introduction of the cooling-off period, to fight against the abusive contractual conditions imposed on the consumer and to fight against excessive prices through control ”, continues the same source.