The banking sector has responded to the wishes of King Mohammed VI to limit to 2% the interest rate which will be applied to the beneficiaries of the Integrated Program for Enterprise Support and Financing that was presented to the Sovereign last Monday at the Royal Palace in Rabat, representing the lowest rate ever applied in Morocco.
During the royal audience granted to the Minister of Economy, Finance and Administration Reform, the Governor of Bank Al Maghrib and the President of the Professional Grouping of Banks in Morocco (GPBM), on Monday January 27, 2020 at the Royal Palace in Rabat, ahead of the ceremony for the presentation of the Integrated Program for Enterprise Support and Financing, HM the King underlined the high interest rate that would be applied to the beneficiaries of this program, said a joint statement by the Ministry of Economy, Finance and Administration Reform, the Bank Al-Maghrib and the GPBM.
However, the ambition of this program and the fact that it mainly targets small and medium-sized enterprises and young project holders require a significant reduction in these rates, said the joint statement, adding that fixing the level of these rates would help promote entrepreneurship, create employment and gradually mark a shift in the mindset related to bank loans.
Knowing that the banking sector will be supported by several measures and provisions such as the establishment of an unlimited refinancing mechanism by Bank Al Maghrib, the application by this same institution of a preferential rate under this program and the increase in the guarantee rate, it said.
In addition, the King instructed the Hassan II Fund to provide the Fund to support entrepreneurship financing with an amount of 2 billion dirhams without interest, intended for the rural world, which means the quarter of the total amount of the fund, with a view to obtaining more preferential rates for this segment.
Therefore, during this audience,the King strongly expressed the wish that the bank interest rate does not exceed 2% to make this program realistic and enable it to positively impact the populations and categories targeted, said the same source.
Responding to the Sovereign’s wishes, the banking sector has limited the interest rate to 2%, which is the lowest rate ever applied in Morocco, the statement added.
Regarding the rural world, the interest rate will be 1.75%, despite the higher “credit risk” due to the narrow market, weather vagaries and large variations in agricultural products’ prices, a measure that will promote the faster emergence of a rural middle class, the same source concluded.