Morocco Seeks to Strengthen Legal Framework for Recovering Non-Performing Loans

Agadir – Morocco is stepping up its efforts to modernize its legal system and enhance non-performing loan recovery as the government and financial actors are urging greater cooperation between the judiciary and the banking sector.

Speaking at a national seminar held today in Rabat on the effectiveness of the legal framework for debt recovery, Justice Minister Abdellatif Ouahbi stressed that addressing distressed bank debts requires a structured and institutionalized dialogue between judicial authorities and financial institutions. 

In a statement shared by the ministry, Ouahbi said that the gathering is a significant initiative to build a platform for dialogue and sharing of expertise on a complex matter that brings together legal and judicial, as well as economic and financial aspects.

He warned that the rising volume of non-performing loans poses risks to financial system stability, undermines trust in transactions, and could affect the continuity of financing for Morocco’s economy.

Ouahbi pointed out the existing gap between banking activities and judicial processes, noting that both perform at different speeds which is an obstacle to effective debt recovery, calling for practical solutions to bridge this divide.

The minister also emphasized the continued cooperation between the Ministry of Justice and Bank Al-Maghrib, which led to the establishment of a working group that includes representatives from the most important judicial and banking institutions and seeks to evaluate the current non-performing loans market and propose the practical reforms needed. 

Some of the measures discussed include creating a digital platform to enable exchanges and electronic transactions between courts and banks, which is likely to speed up procedures. There was also a restatement of plans to create a jurisprudence platform to ensure stakeholders have better access to judicial interpretations of banking legislation.

These measures include creating a digital platform to enable exchanges and electronic transactions between courts and banks, which is likely to speed up procedures. 

For his part, Hicham Balaoui, Attorney General at the Court of Cassation and Head of the Public Prosecutor’s Office, indicated that NPLs represented 8.3% of total bank loans by the end of January 2026, reaching nearly MAD 100 billion ($10 billion). 

He called for revisions to legal provisions governing enforcement procedures, as well as improvements in judicial expertise and the handling of distressed assets.