Economy & Politics

Morocco: banks postpone credit maturities by three months

In its measures taken to combat the economic repercussions of Covid-19, the Groupement Professionnel des Banques du Maroc (GPBM) decided to postpone for three months the credit terms for households, very small businesses, SMEs and large companies. In return, the banking group asked the Moroccan Central Bank (Bank Al Maghrib to relax the conditions for refinancing credit institutions in its counters) and large companies to accelerate the payment of SMEs and VSEs. Here in substance are the measures taken by Moroccan bankers, which will have to be validated by the Economic Watch Committee (CVE), this Monday, March 23 and by Bank Al Maghrib, to take effect.

I. Deferment of installments for depreciable credits:

at. Individuals and professionals (privacy) : banks will grant
all their customers who request it in writing the postponement of the settlement of
depreciable installments (real estate loans and loans to the
consumption), for a period of 3 months, renewable once for
a similar duration. The second postponement must be justified upon request
written argument of the client duly argued.
Three prerequisites must be met:

  • Extension for the same periods of the CGC guarantee on
    loans covered by one of its hedging instruments:
    Fogarim, Fogaloge, Fogalef, …
  • Extension of disability death insurance coverage for
    the same durations
  • Deletion for the deferrals granted in this context of the
    regulatory provision of the law for the protection of
    consumer, providing for a withdrawal period of 7 days.

b. Professionals and VSEs: the banks will grant to their customers who request it in writing postponement of the settlement of the maturities of their medium and long term credits, for a period of 3 months, renewable for a similar period. For this second postponement, the client must produce a duly argued written request.

Two prerequisites must be fulfilled:

  • Extension for the same periods of the CGC guarantee on
    loans covered by one of its hedging instruments, such as
    that Damane Express,…
  • Extension of insurance coverage covering these credits
    (ADE, DAI,…).

vs. Businesses : banks will grant companies that
request the postponement of the settlement of the maturities of their credits to
Medium and Long term for 3 months, extendable for a similar period.
These requests will be considered on a case-by-case basis. The deal that will be like this
marked, after study, for the 1st extension will be renewed by tacit agreement
renewal for the second postponement, if the company requests it, unless advised
duly motivated from the bank.

II. Coverage of the working capital needs of companies (TPME and GE), born from the situation induced by the COVID health crisis. 19:

at. To enable companies to cope with the drop in their turnover
banks and declining collections, banks will grant
the extension of operations in progress: Credocs, currency refinancing or
spots, keeping visibility on the ability of companies to cover these
operations at the end of their new maturities.

b. Banks are ready to support businesses to provide them with the appropriate responses to meet their cash flow needs, with a view to enabling them to preserve their production tools (payment of salaries, payment of suppliers, maintenance of equipment, etc.). The financing solutions that will be provided in this context must be backed by guarantee instruments, which are currently being examined by the public authorities.

III. Banks’ cash requirements:

To allow banks to meet their additional cash requirements, caused by the massive withdrawals of customer deposits noted in recent days, and which will be amplified by the postponement of collections of amortizable loans, and in the case of needs which were not not foreseeable and therefore not anticipated, the banks request the support of Bank AlMaghrib, on the following requests:

at. Relaxation of the refinancing mechanism with Bank AlMaghrib, so as not to restrict access to the facilities to those requiring
a BDT collateral, and this by widening the eligibility rules of the
collateral on advances to 7 days receivables (of good quality) on the
Corporate clients, and mortgage loans.
b. Lower the rate on the accounts receivable (CCR) from 7% currently to 2% for
inject liquidity, with thresholds of amounts to be defined by Bank AlMaghrib.
vs. Reduce the monetary reserve, for a period of 3 months to be extended, by
liquidity tensions persist.
d. central bank easing on rules
prudential including circular 19 G.

Finally, the banks are committing and calling for a similar commitment from the country’s major operators, for the very rapid payment of their debts vis-à-vis the MSMEs.

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