The result largely reflects a 1.5% deceleration in the growth of loans granted to households, BAM said.
Rabat – Morocco’s central banking institution, Bank Al Maghrib, announced that bank credit increased by 6.5% in May 2020, with loans to the non-financial sector increasing by 6.4%.
The result is largely due to the 1.5% deceleration in the growth of loans granted to households as well as loans allocated to public non-financial companies, the bank said on July 1.
The rate of increase in loans to private non-financial firms maintained close to a stable rate, at 11.3% in May, compared to a month earlier.
“The slowdown in the growth of bank credit to the non-financial sector covers a deceleration in the rate of increase in cash loans to 14.4%, that of property loans to 1%, as well as that of equipment competitions at 6.8%,” the bank said in a note.
Meanwhile, consumer loans declined by 0.7% after rising 1.5% the previous month.
In a similar note in May,Bank Al Maghrib reported an acceleration of bank credit, which jumped from 5.3% in March to 6.7% in April this year.
The development in May reflected the acceleration from 9.6% to 11.4% in the increase of loans to private non-financial companies.
Loans to public non-financial corporations represented an increase of 1.3% in May.
The COVID-19 crisis might be a direct motive for households to turn to loans due to work suspension.
Morocco’s government announced a state of emergency and a lockdown in March to contain the spread of COVID-19. Several companies suspended activities and employees were left without jobs for several months.
The lockdown impacted Morocco’s economy directly, Minister of Economy Mohamed Benchaaboun announced in May.
The minister said in May that Morocco’s economy loses up to MAD 1 billion, or $100 million, during each day due to lockdown.
He said the loss would have been much bigger if King Mohammed VI did not order the creation of a COVID-19 pandemic management fund to mitigate the crisis.
Morocco recently allowed the re-launch of all industrial activities as part of the country’s approach to gradually ease lockdown.
Most of the Moroccan regions benefited from lockdown easing, except some provinces in Larache, Tangier, Kenitra, and Marrakech.
Head of Government Saad Eddine El Othmani announced earlier this week that the country will focus on its economy to challenge the crisis and the consequences of COVID-19.