Rabat – The European Bank for Reconstruction and Development (EBRD) has approved a loan of up to €10 million to Fondation Arrawaj, one of the country’s largest microfinance institutions.
The financing is aimed at empowering young entrepreneurs and small businesses in Morocco, with a particular focus on areas hit by the Al Haouz 2023 earthquake.
Supporting youth-led businesses
The loan is part of the EBRD’s Youth in Business programme, designed to address financing gaps faced by micro, small, and medium-sized enterprises (MSMEs) led by entrepreneurs under the age of 35.
Despite their potential, youth-led businesses in Morocco often face difficulties accessing capital. Only about 14% of young Moroccans have a bank account, which showcases a lack of financial inclusion amongst young Moroccans.
Technical support and risk coverage
In addition to the loan, the facility will include a technical cooperation package to strengthen Fondation Arrawaj’s capacity to meet the needs of eligible MSMEs.
This package will provide staff training, digital and non-financial support for sub-borrowers, and results-based incentives funded by the EBRD.
To further encourage lending in quake-affected areas, the loan will also benefit from a first-loss risk cover on sub-loans. This mechanism reduces the risk for the microlender while ensuring that entrepreneurs in vulnerable regions have better chances of securing financing.
Fondation Arrawaj’s role in microfinance
Founded in 1996 under the name FONDEP, Fondation Arrawaj has grown into Morocco’s third-largest microfinance institution.
As of March 2025, it managed nearly €200 million in assets, commanded a 19% share of the microfinance lending market, and served about 120,000 clients through 256 branches across 15 regions. The institution employs nearly 2,000 personnel.
Morocco and the EBRD
Morocco, a founding member of the EBRD, has received over €5.8 billion in investments across 123 projects since 2012. The Bank’s portfolio in the country focuses on sustainable energy, private enterprise financing, infrastructure reform, and non-sovereign funding.
The new partnership with Fondation Arrawaj reinforces these priorities by strengthening the financial ecosystem for young entrepreneurs, an essential component of Morocco’s long-term growth and resilience strategy.
