King Mohammed VI presided, Monday at the Royal Palace in Rabat, over the ceremony of presentation of the integrated program to support and finance enterprises and the signature of related agreements.
On this occasion, the King granted an audience to Minister of Economy, Finance and Administration Reform Mohamed Benchaaboun, Governor of Bank Al-Maghrib Abdelatif Jouahri and President of the Professional Grouping of Banks of Morocco (GPBM) Othman Benjelloun, during which Benchaaboun handed the Sovereign documents relating to this program.
Afterwards, during a ceremony at the Throne Hall, Minister of Economy, Finance and Administration Reform Mohamed Benchaaboun, gave before the Sovereign a speech in which he stressed that immediately after the speech of the sovereign at the opening of the current parliamentary session, Oct. 11, and in accordance with the Royal Guidelines concerning the facilitation of access to finance for businesses, the government, Bank Al-Maghrib and the banking sector held several meetings that led to the elaboration of the “Integrated Program to Support and Finance Enterprises”.
This program touches on three main outlines, namely the financing of entrepreneurship, the coordination of support actions for entrepreneurship at the regional level and the financial inclusion of rural populations, said Benchaaboun, noting that this program includes several measures intended to contain and overcome the difficulties that hinder access to finance for young project holders and very small and small enterprises.
The Economy Minister affirmed that, under this program, a special account called “the Fund to support entrepreneurship financing” was created under the 2020 Appropriation Bill. The said fund has a budget of 6 billion MAD spanning 3 years, financed equally by the State and the banking sector, he said.
The fund, which mobilizes significant financial resources, will mainly benefit young project holders and small and medium-sized enterprises to enable them to have access to financing, in addition to support for companies active in the export sector, added Benchaaboun, pointing out that it will also promote economic and professional integration of workers in the informal sector.
According to the Minister, this is a new incentive and an integrated framework, based on guarantee, financing, private equity and technical assistance mechanisms, set up for the benefit of very small, small and medium-sized companies, young project holders and young innovative companies and self-entrepreneurs, in addition to the revision and improvement of the support intended for exporting companies, especially towards Africa, as expressed in the sovereign’s speech.
Benchaaboun assured, in this regard, that his department will adopt, in collaboration with Bank Al-Maghrib and the banking sector, a more proactive approach, mainly in terms of simplification of procedures, facilitation of guarantee conditions by eliminating personal guarantees, and reduction of the costs of credits, announcing that this program “will contribute, each year, to the creation of approximately 27,000 new jobs and to the support of 13,500 additional companies”.
To ensure full success of this program, Benchaaboun said that commissions will be created at the regional level, which will be tasked with coordinating and monitoring the implementation of measures relating to entrepreneurial support.
He also indicated that the Ministry of Economy, Finance and Administration Reform will work with Bank Al-Maghrib to speed up the implementation of the national strategy for financial integration, underlining that the parties concerned will work, as a first step, to strengthen their action in rural areas.
Similarly, the Ministry of Economy, Finance and Administration Reform will ensure, in coordination with Bank Al Maghrib, the monitoring of the implementation of this program, through the establishment of periodic reports which will be submitted to the Sovereign, he concluded.
Speaking on this occasion, Governor of Bank Al-Maghrib Abdelatif Jouahri pointed out that the Central Bank has, within the framework of the global and integral implementation of the Royal Instructions laid down in the Royal Speech on the occasion of the opening of the autumn parliamentary session of 2019, adopted a set of measures, notably the establishment of an unlimited refinancing mechanism by Bank Al-Maghrib of all credits granted to the categories mentioned by the Sovereign in this speech, whether they are operating or investment loans.
This refinancing mechanism will also benefit funding for the agricultural sector and projects carried out in rural areas, said Jouahri, noting that this mechanism is an addition to the special program set up in 2012 by Bank Al-Maghrib and relating to direct refinancing of bank loans granted to very small, small and medium-sized enterprises.
It also concerns the application of a preferential interest rate of 1.25 pc as part of the refinancing mechanism of the banks in the target categories, that is 100 points less than the key rate of Bank Al-Maghrib, and the reduction in equity capital requirements as part of the precautionary rules applied to banks with regard to the loans they grant to these categories, he said.
Jouahri also said that Bank Al-Maghrib started developing, in collaboration with the Ministry of Economy, Finance and Administration Reform and the GPBM, a model of detailed reports which will be submitted by the banks and which will make it possible to follow, in a precise manner, the indicators relating to the different categories of loans, their geographical and sectoral distribution and, if necessary, the reasons for refusal of loans.
Jouahri also pointed out that the success of this program is the responsibility of all the stakeholders concerned, in particular the banking sector, public establishments and the beneficiary citizens who must be committed in a positive way to this program and ensure that they honor their commitments.
In a similar speech, President of the GPBM Othman Benjelloun assured that the banking sector undertakes to contribute by up to 3 billion dirhams, in equal shares with the Government and Bank Al Maghrib, to the financing of the “Fund of Entrepreneurship Financing Support”.
“Each of the Banks undertakes to provide young project holders and small and medium enterprises with all the support and time they need, in terms of proximity, assistance for structuring, training and consultancy, in all economic sectors and across the Kingdom”, he stressed.
He added that the Banks pledge that the products offered to young entrepreneurs will be easy to access and use, thanks to streamlined constitution and guarantee procedures, benefiting from free of charge applications and low interest rates, thanks to a privileged refinancing rate granted to banks by Bank-Al Maghrib.
The banks’ commitment is also that the response times to entrepreneurs do not exceed three weeks, said Benjelloun, noting that these deadlines will be improved when the banks will be entrusted by the “Caisse Centrale de Garantie” the delegation of guarantee of up to 80% of the amount of the loan.
Entrepreneurs will see their access widened to the various financial services in general, thanks to a larger network for regions not yet served, technological tools such as Mobile Banking, as well as Microfinance and MicroAssurance, he said.
“The success of this system relies on individual support carried out at local, regional and national levels, by the Regional Investment Centers, the Caisse Centrale de Garantie and the Moroccan Agency for SME, noted Benjelloun.
Subsequently, the King presided over the signing of three agreements relating to the implementation of the Integrated Program to Support and Finance Enterprises.
The first is an agreement between the Ministry of Economy, Finance and Administration Reform, Bank Al-Maghrib and the Professional Grouping of Banks in Morocco for entrepreneurship financing. It was signed by Minister of Economy, Finance and Administration Reform Mohamed Benchaboun, Governor of Bank Al-Maghrib Abdelatif Jouahri and President of the Professional Grouping of Banks in Morocco Othman Benjelloun.
The second agreement is related to the coordination of entrepreneurship support actions at the regional level. It was signed by Minister of the Interior Abdelouafi Laftit, Mohamed Benchaaboun, Abdelatif Jouahri, Othman Benjelloun, President of employers’ association (CGEM) Chakib Alj and director general of the Office of Vocational Training and Labor Promotion (OFPPT) Loubna Tricha.
The third document is a partnership agreement between Crédit Agricole du Maroc and Al Barid Bank relating to the financial inclusion of rural populations. This agreement was signed by Mohamed Benchaaboun, Abdelatif Jouahri, Chairman of the Executive Board of Crédit Agricole du Maroc Tarik Sijilmassi, and Chairman of the Board of Al Barid Bank Najmeddine Redouane.