The program will assist companies on the verge of bankruptcy and banks issuing loans.
Rabat – Morocco’s Ministry of Economy, Finance, and Administration Reform has launched a new guarantee program, “Damane Oxygene,” to protect businesses from bankruptcy amid the novel coronavirus crisis.
Under the new program, the Central Guarantee Fund (CCG) will collect financing resources for companies with a deteriorated cash flow due to the decline or suspension of their activity, said the Ministry of Economy in a press release.
The CCG will cover 95% of the companies’ loans, allowing banks to set up exceptional overdrafts to finance the concerned businesses’ needs, according to the statement.
The new financing operations will cover up to three months of the companies’ current operating expenses, including salaries, rents, and payment of necessary purchases.
For businesses already enrolled in a line of credit, the financing maximum is MAD 20 million ($2 million). For companies that do not have short-term financing lines, the exceptional overdraft maximum is MAD 5 million ($500,000).
Damane Oxygene mainly targets micro-, small-, and medium-sized businesses with an annual turnover of less than MAD 200 million ($20 million), as they face the highest risk of bankruptcy.
Due to the exceptional nature of the COVID-19 crisis, companies with a turnover ranging between MAD 200 million and MAD 500 million ($20 million and $50 million) may also benefit from the program, determined through a case-by-case review process, revealed the ministry.
The initiative is the latest installment from the Economic Monitoring Committee (CVE), chaired by the Ministry of Economy, which was created to mitigate the effects of the coronavirus pandemic on the Moroccan economy and society.
On March 16, the CVE created an action plan to protect both businesses and employees, and assist them until the end of the crisis. The plan, effective until the end of June, includes a series of measures across various sectors.
The committee suspended the payment of social security contributions and reimbursements of bank loans for the benefit of businesses.
It also announced the allocation of a MAD 2,000 ($200) monthly stipend for all employees registered under the National Social Security Fund (CNSS) who were suspended from work.
The stipend includes family allowances as well, along with medical coverage under the Obligatory Medical Insurance (AMO) program.