Closed Compact Report: Morocco Compact | October 2015
Financial Services Project
- $46,200,000Original Compact Project Amount
- $42,817,020Total Disbursed
|Time||Estimated Economic Rate of Return (ERR) over 20 years||Estimated beneficiaries over 20 years||Estimated net benefits over 20 years|
|At compact closure||13.5 percent||825,240||$6,421,000|
Estimated benefits corresponds to $47.9 million of project funds, where cost-benefit analysis was conducted.
The Financial Services Project sought to provide low-income populations with access to microfinance services (particularly micro-entrepreneurs or small individual borrowers) by developing a network of mobile micro-credit associations. These networks are the main providers of financial services to those lacking access to the traditional banking system. MCC funding supported Jaida, a financial institution launched in late 2006 that makes loans in the Moroccan microcredit sector. Funds were also used to support reforms allowing the transformation of microcredit associations into formal financial institutions, authorized not only to provide credit but also savings, insurance and other non-credit financial services. Finally, funding was provided for technical assistance to financial institutions to improve both efficiency and transparency in the financial sector and to lower borrowing costs for micro-enterprises. At the end of the project, MCC had provided $25 million in loans via the Jaida Microfinance Investment Fund, which supported thousands of Moroccan micro and small enterprises. Regulatory changes and technical assistance allowed microfinance institutions to seek new sources of funding and provide new services to clients.
MCC conducted a performance evaluation of the Financial Services Project. The Summary of Findings can be found here. Key findings include:
- The subordinated loan made to Jaida supported the recovery of the microfinance sector by providing at least $33 million of financing to Microcredit Associations (AMCs). The expected decrease in the risk profile of AMC was not measurable as of the Compact End Date. However, this loan benefitted an estimated 51,000 microenterprises, with potential to reach 400,000 microenterprises over a period of 8 years.
- The results of the first mobile branch client surveys are likewise encouraging. In the medium term, tens of thousands of microenterprises operating in the remote areas served by these branches will potentially have access to financial services.
- At the time of the evaluation, access to credit for the people of 350 rural communities had been improved as a result of the mobile branches. While unable to attribute income impacts to the compact intervention, the evaluation’s surveys found that almost 40% of customers of mobile agencies believed their annual income had increased by 5,000 DH or more (an increase of about 50% over the average income prior to obtaining credit).
Key performance indicators and outputs at compact end date
|Activity/Outcome||Key Performance Indicator||Baseline||End of Compact Target||Quarter 1 through Quarter 20 Actuals (as of Dec 2013)||Percent Compact Target Satisfied (as of Dec 2013)|
|Access to Funds for Microfinance Activity||Clients reached through mobile branches
|Microfinance institutions’ portfolio at risk at 30 days (%)
|Value of loan agreements between AMCs and Jaida (Million MAD)
|Value of loan disbursements to Jaida (USD)||0||25,000,000||25,000,000||100%|
|Value of loans granted through mobile branches (USD)