The World Bank’s Board of Directors has approved the third Development Policy Loan (DPL) of $450 million for Morocco, with the objective of developing financial and digital inclusion in addition to the two previous financings.
“This series of financing projects supports the Government of Morocco in the implementation of reforms aimed at improving financial inclusion, digital entrepreneurship and access for individuals and businesses to digital infrastructure and services”, indicates the World Bank. The same source adds that these funds have enabled Morocco to significantly push back the barriers of financial and digital inclusion, noting that the infrastructure for digital payments has also developed and that currently 31% of rural areas are covered by mobile payment networks and 19 providers offer their services.
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The value of digital payments has increased significantly, reaching 2 billion dirhams (about $195 million) in 2021, laying the groundwork for reforming social protection programs through digital cash transfers. The series of financings enabled the development of micro-insurance, the registry of collateral and guarantees to facilitate access to credit for MSMEs. Different actions have directly promoted women’s access to finance and economic empowerment, adds the same source, which indicates that the participation of women on the boards of directors of listed companies increased by 14.9% in 2019. to almost 20% by the end of 2022 and that 13.5% of women-led tech start-ups benefited during the COVID-19 pandemic from an annual foreign exchange allowance, thus facilitating the importation of goods and services necessary for their activities. “This third financing is in line with the recommendations of the New Development Model (NMD) which underlines the need for a paradigm shift aimed at promoting inclusive and private sector-led growth in order to improve public services and reduce social and geographical disparities,” explains the director for the Maghreb and Malta at the World Bank, Jesko Hentschel.
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“The Government of Morocco has begun to implement these recommendations by digitizing social protection programs, supporting crowdfunding and non-banking instruments for innovative businesses, and digitizing public procurement to improve access for SMEs to public contracts,” he adds. This third financing consolidates the reforms initiated by Morocco in favor of financial inclusion by improving the access of rural populations, women, young people, and digital entrepreneurs to a wide range of financial services, by diversifying the financial instruments available to young and innovative companies in order to encourage job creation.
“These reforms include a new legal regime for microfinance institutions that allows them to take deposits and expand their reach, but also regulations to expand microinsurance, and a new law on credit bureaus for the processing of non-financial data so that the unbanked can benefit from a history to access credit”, underlines Caroline Cerruti, Principal Financial Sector Specialist, and co-manager of the Program at the World Bank.
“The reforms also involve the implementation of digital management and payments for Morocco’s largest cash transfer program, Tayssir,” says Caroline Cerruti. This PPD also supports digital entrepreneurship and innovative MSMEs. “The PPD offers new financing instruments that benefit MSMEs – sometimes considered too risky for traditional banks – including crowdfunding for new businesses, private equity for innovative and high-potential businesses and debt funds that mobilize institutional investors to finance existing SMEs,” says Cyril Desponts, economist and co-head of the Program at the World Bank.