Survey: 77% of Moroccan Adults Borrow from Family Instead of Banks

A recent World Bank report on financial inclusion has found that 77% of adults in Morocco prefer to turn to family and friends to borrow money instead of opting for bank services.

Rabat – A recent World Bank report on financial inclusion has found that 77% of adults in Morocco prefer to turn to family and friends to borrow money instead of opting for bank services.

The trend echoes that of some developing countries where family and friends are the most common sources of credit, the report indicates.

According to World Bank data, almost half of the creditors in developing economies opt for borrowing from family and friends while the other half resort to formal financial institutions.

In Morocco, only around 5% of creditors turn to formal crediting institutions for loans, another 5% opt for semi-formal crediting institutions, and more than 30% turn to other sources including borrowing from friends and family.

Titled “The Global Findex Database 2021, Financial Inclusion, Digital Payments, and Resilience in the Age of Covid-19,” the World Bank’s report offers insights into the level of financial inclusion within developing economies while detailing the underlying reasons for the low rates of financial inclusion.

Overall, the report notes that the primary reason for the low rate of financial inclusion among developing economies is the lack of money.

Over 60% of participants in the World Bank survey stated that lack of money is one of their main reasons for opting out of banking services.

Meanwhile, almost 35% of respondents said that the high cost of financial services is one of the reasons or the primary reason behind their reluctance to access banking services.

Around 23% cited a “lack of trust” in financial institutions as a primary reason or one of the reasons they do not turn to financial services for loans, while nearly 10% cited religious reasons, maintaining that the current financial system does not align with their religious beliefs.