According to Bank Al-Maghrib, household debt in Morocco is on the rise. In 2018, Moroccan households had a debt of MAD 42,500 each, an increase in debt of 6.1% from 2017.
Rabat – Every year, Morocco’s central bank, Bank Al-Maghrib, releases a report identifying trends in Moroccan trends in household debt.
For its 2018 report released on July 22, Bank Al-Maghrib reviewed data from the 11 banks and 10 consumer credit bodies that make up the majority of Morocco’s lending institutions. Data includes the age, income, professional occupation and geographic location of debt holders.
The report finds that during 2018, household debt increased by 6.1%, to MAD 42,500 per household, or a total of MAD 342 billion. This amount represents 31% of Morocco’s GDP.
In terms of the debt types, consumer credits account for 36% of household debt, and housing loans make up 64% of the debt.
Who is buying houses?
Housing debt in Morocco sat at MAD 219 billion, and most of this is borrowed by Moroccans over 40. The Bank Al-Maghrib report finds that 65% of the debt is held by Moroccans aged over 40, and 29% is held by Moroccans aged between 30 and 40. Only 6% of the housing debt is held by Moroccans aged under 30.
Low income is not keeping Moroccans out of the debt market: the report identifies that 31% of borrowers earn less than MAD 4,000 per month.
Those earning between MAD 4,000 and 10,000 a month make up 39% of borrowers, while 30% of borrowers earn more than MAD 10,000 a month.
When it comes to job profiles, salaried employees and public servants are the main housing debt holders at 81%. Artisans and tradespeople make up 13% of borrowers.
What about consumer debt?
According to Bank Al-Maghrib, the average consumer credit amount in 2018 was MAD 51,000, a drop from MAD 53,000 in 2017.
Most debt holders are aged between 30 and 49 years old (50%), 40% are aged over 50 and 10% are aged under 30.
36% of debt holders have an income below MAD 4,000 per month.
The economic implications of household debt sitting at 31% of Morocco’s GDP are broad.
As noted by the International Monetary Fund (IMF), household debt and access to credit can help boost a country’s demand and build individual wealth. It also allows households to make investments in things like housing and education, and increasing quality of life.
However, high levels of debt can also be a source of financial vulnerability. Households can face significant debt repayment problems if a country’s economy faces negative economic shocks.
Moroccans are already pessimistic about saving money in the face of rising living costs. According to figures from the High Commissioner for Planning (HCP), Only 16.7% of households expect to save money in the next 12 months. Debt repayment requirements can place further pressure on household finances, and contribute to pessimism on saving abilities.