Using cash is on the rise in Morocco, as recession affects loans

Using cash is on the rise in Morocco, as recession affects loans

The latest monetary figures released by the Central Bank of Morocco showed cash transactions are on the rise, as bank credit and loans to the private sector, which encompasses households and private businesses, remain largely stagnant.

Total credit and bank loans in Morocco saw a modest rise of 4.6% by the end of September 2023, reaching a total value of MAD 1.084 billion. This figure indicates a year-on-year increase of MAD 47.8 billion, or 4.6%. 

However, beneath this number, the bank reveal significant disparities based on the type and structure of the sectors benefiting from these loans. 

The Central Bank of Morocco attributes the overall credit increase primarily to financial institutions and public enterprises, both of which experienced double-digit growth in their financing volumes.

In contrast, credit directed towards the private sector, which includes households and private companies, witnessed only a marginal increase of 0.8%. 

This rise was driven primarily by loans extended to financial companies and public enterprises, with the former recording a 19.4% growth, amounting to MAD 27.2 billion, and the latter seeing a substantial 26.4% increase, totaling MAD 12.9 billion.

Within the private sector, loans disbursed to households and enterprises during the first nine months of 2023 displayed minimal change, with a growth rate of just 0.8% or MAD 6.4 billion. 

Family loans experienced a slight upturn of 2.3%, equivalent to MAD 8.6 billion, whereas loans to private companies contracted by 0.5% or MAD 2.1 billion.

The statistics also highlight divergent trends in different credit categories. While consumer receivables, driven primarily by financial companies, exhibited a robust increase, other credit categories displayed moderate or even negative developments, depending on the purpose and economic quality of the loans. 

Notably, housing and real estate loans increased by 2.1%, while consumer loans rose by 0.6%. 

On the other hand, treasury facilities, also known as “Crédits de trésorerie,” declined by 6.1%, while loans for equipment registered an 8.8% increase, mainly due to public enterprises.

A striking observation in the monetary statistics is the faster growth of outstanding receivables and bad debts concerning the total outstanding loans, with a percentage increase of 7.4% or MAD 6.6 billion. This brings the total bad debts to MAD 95.1 billion, representing 9% of all loans.

In parallel, the circulation of paper currency or cash reached a value of MAD 386.7 billion by the end of September 2023, marking a significant increase estimated at 12.8%, or MAD 43.8 billion, on an annual basis.

On the other hand, bank deposits exhibited a notable increase of 4.2%, or MAD 45.4 billion, resulting in a total of MAD 1.132 billion. 

Official data highlights that deposits on demand with Moroccan banks played a pivotal role in driving this growth, surging by nearly 8%, equivalent to MAD 56.9 billion, constituting the largest portion of deposits at MAD 781.2 billion. 

In contrast, term deposits and fund bonds with banks declined by 3.9%, amounting to MAD 4.8 billion, culminating in a total of MAD 116.4 billion.


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