The Board of Directors of the World Bank (WB) approved a third additional Development Policy Financing (DPF) of $450 million aimed at enhancing financial and digital inclusion in Morocco.
“The series of financing projects supported the government of Morocco in implementing reforms to improve financial inclusion, digital entrepreneurship, and access to digital infrastructure and services for individuals and businesses,” reported the World Bank (WB) in a statement.
The Washington-based institution noted this series has enabled Morocco to significantly move the frontiers of financial and digital inclusion, stressing that the digital payments’ infrastructure has expanded to include 31% of rural districts which are currently covered by mobile payment networks and 19 mobile payment providers.
The World Bank (WB) explained that the value of digital payments has significantly grown to reach 2 billion Moroccan dirhams in 2021, setting the foundation for a reform of social protection programs with digital cash transfers, stressing that the series of financing has enabled the development of microinsurance, collateral registry and guarantees to support credit to micro, small and medium-sized enterprises (MSMEs).
The international organization added that several actions have directly supported women’s access to finance and economic empowerment, noting that women’s participation in the Boards of listed companies increased from 14.9% in 2019 to almost 20% by the end of 2022 and that 13.5% of tech start-ups led by women benefited from an annual foreign currency allocation during the Covid-19 pandemic to import goods and services needed for their activities.
“This third financing is in line with the recommendations of the New Development Model (NDM), which emphasizes the need for a paradigm shift to promote inclusive, private sector-led growth to improve public services and reduce social and spatial disparities,” said Country Director for the Maghreb and Malta at the World Bank, Jesko Hentschel.
The World Bank (WB) further added that this third financing strengthens Morocco’s reforms to foster financial inclusion by expanding access to a wide range of financial services to rural populations, women, and youth, and digital entrepreneurship by diversifying the financial means available to emerging and innovative firms to support job creation.
“These reforms include a new legal regime for microfinance institutions allowing them to take deposits and expand their outreach, regulations to expand microinsurance, and a new law on credit bureaus for processing non-financial data so that the unbanked people can get a history to access credit,” explained Senior Financial Sector Specialist, and Program Co-Leader at the World Bank, Caroline Cerruti.
“The reforms also include the implementation of the digital management and payments for Morocco’s largest cash transfer program Tayssir,” added Cerruti.
For his part, Economist and Program Co-Leader at the World Bank, Cyril Desponts, affirmed that “the Development Policy Financing (DPF) offers new financing instruments that benefit MSMEs, including crowdfunding for new businesses, private equity for innovative and high-potential companies, and debt funds that mobilize institutional investors to finance existing SMEs.”
The World Bank concluded in its statement that the reform of the private equity law will support the government’s efforts to modernize and decarbonize the economy through Mohammed VI Fund for Investment, which will raise and invest private equity funds, noting that this reform, along with the introduction of a regulatory framework for debt funds, is supported by the Joint Capital Markets Program.
