Publication: Ending the Microfinance Crisis in Morocco: Acting Early, Acting Right
Date
2014-10-01
ISSN
Published
2014-10-01
Author(s)
International Finance Corporation
Abstract
In the fall of 2008, the Moroccan
microfinance sector underwent what in economics is referred
to as a Minsky moment, the sudden realization that the
market has overshot and that the good times are coming to an
end. In this particular case, the Minsky moment was a
specific event – the private circulation of an IFC study
that found extensive problems with the portfolios of the
country’s four largest Microfinance Institutions (MFIs), and
one in particular – Zakoura. This study picks up from
Morocco’s Minsky moment. The MFIs at the time were beginning
to see unequivocal signs that the market was shifting. The
lead-up to this moment has been well documented: the
reckless pursuit of growth, fed by an equally reckless
influx of funding, both foreign and domestic, the high rate
of multiple lending, poor lending standards and equally poor
back-office and management information systems (MIS), and
poor governance – all have been noted as causes of the
crisis. While this study is meant to cover the full Moroccan
microfinance sector, due to constraints of time and
availability of data, its primary focus is on the three
largest MFIs in Morocco. This report is organized into three
key sections: 1) a review of the main drivers and factors
evident during the course of the Moroccan microfinance
crisis (2008-2011); 2) an examination of the key responses
taken by the MFIs during the course of the crisis; and 3) a
review of government actions and other market-level changes
that affected the nature and trajectory of the crisis. The
authors close with a look at the future prospects for
microfinance in Morocco.
Citation
“International Finance Corporation. 2014. Ending the Microfinance Crisis in Morocco: Acting Early, Acting Right. © International Finance Corporation, Washington, DC. http://hdl.handle.net/10986/26054 License: CC BY-NC-ND 3.0 IGO.”