By Rania Tazi
By Rania Tazi
Casablanca – The World Bank’s board of directors will meet on July 14 in Washington DC to approve a 300 million dollar loan to Morocco.
According to lematin.ma, this loan marks the second phase of a two-step financing operation. The first phase consisted of a 300 million dollar loan as well, and was approved by the World Bank’s board of directors in April 2014.
The second phase will consist of the to-be approved loan of another 300 million dollars and will be used to support the nation’s financial sector and targets the development of capital markets. It will also not only enhance the management of the Caisse marocaine de retraite, which deals with retirement reforms in the public sector, but also improve Small and Medium-sized Enterprises SME’s access to financing.
The same source adds that the document submitted to the World Bank “recognizes the need for a properly functioning capital market to ensure resilient economic competitiveness via a more diversified financial intermediary.”
The Moroccan government will use the loan to meet its goals of diversifying the financial sector in order to fund the real economy while maintaining financial stability. It deems that the financial sector is well placed to overcome developmental challenges with the modernization of the capital markets.
This sector is said to be “vast and diverse,” with 25 banks, 18 insurance companies, 8 large pension funds, 373 mutual funds, 35 financial corporations, 13 microcredit institutions and 2 state-owned specialized financial groups. The loan will also be used to fund innovative start-ups and to support SME with easier access to funding.
The plan for development of the financial sector in Morocco, presented by the government at the Bretton Woods Institution, will require 450 million dollars in total funding. In addition to the World Bank, the African Development bank will also, after approval of the loan, contribute to the project with a loan of 125 million dollars.