Agadir – The International Finance Corporation (IFC) is preparing to establish a €60 million Distressed Asset Recovery Program (DARP) facility in Morocco with German distressed-assets investor EOS Holding GmbH to purchase non-performing loans (NPLs) and real estate-owned assets from Moroccan financial institutions.
Known as DARP NPL EOS Morocco, the proposed facility would target retail, small and medium-sized enterprise (SME), and corporate NPLs, as well as real estate assets owned by financial institutions following loan recovery procedures.
The project would mark IFC’s first DARP investment in Morocco. It would be jointly funded by IFC and EOS through pari-passu equity investments, with each partner committing up to €30 million.
IFC’s proposed equity investment would amount to up to €30 million.
Facility to target non-performing loans, real estate assets
The facility is designed to purchase distressed assets from Moroccan financial institutions, enabling lenders to remove NPLs from their balance sheets and recover capital tied up in troubled loans.
The target assets would include both secured and unsecured NPLs involving retail borrowers, SMEs, and larger companies, alongside real estate-owned assets.
According to the project description, the investment is expected to provide capital relief for participating financial institutions by facilitating the disposal of NPLs. This could allow banks and other financial institutions to recycle capital into new lending.
The project is also expected to help borrowers normalize their financial obligations by creating a mechanism through which distressed loans can be acquired and managed by a specialized investor.
IFC expects broader market impact
Beyond the direct acquisition of distressed assets, IFC expects the project to contribute to greater competitiveness in Morocco’s distressed-asset market.
By enabling financial institutions to dispose of NPLs, the facility could help strengthen lenders’ balance sheets and create additional capacity for new credit.
The project is also expected to contribute to the development of the market for distressed assets in Morocco by introducing additional institutional investment and specialized asset-management expertise.
