Morocco’s Central Bank governor has pledged to set up an unlimited refinancing mechanism for loans of youth projects.
Moroccan banks will refinance small and medium-sized enterprises (SMEs) at 1.25 percent preferential interest rate as part of a plan to ease access to loans, Morocco’s state news agency said on Monday, citing Central Bank Governor Abdellatif Jouahri.
The rate is 100 points lower than the central bank’s benchmark interest rate held at 2.25 since 2016.
The plan was developed together by the government, the central bank and commercial banks after King Mohammed VI decried, in a speech last October, the limited financial support for young graduates and SMEs. He urged banks to contribute to development efforts and to make loans easier.
The country’s Central Bank is considered an independent institution since the amendment of its statute in 2005, and it is charged exclusively with leading the country's monetary policy and ensuring price stability.
During the announcement ceremony, Minister of Finance Mohamed Benchaaboun presented the program’s detailed documents, which included the three parties’ commitments.
Under the same plan, the government and commercial banks set up a fund worth six billion dirhams ($620 million) covering three years to boost the financing of SMEs, young entrepreneurs and to help curb the gray economy, the minister noted.
He pointed out that the program will adopt a set of integrated mechanisms, including loans and financing, take contributions to projects, provide guarantees and technical support and keep up with guidance.
The program aims at creating 27,000 new job opportunities and keeping pace with 13,500 additional construction projects per year.
President and CEO of BMCE Bank (Moroccan Bank for External Trade) Othman Benjelloun, for his part, stressed before King Mohammed VI the banks’ commitment to fully participate in the program, in implementation of the royal directives.
He specifically highlighted the banks’ commitment to freeing their share of the capital of the entrepreneur financing fund and finding a financing proposal for preferential terms in favor of the program’s targeted groups.