How digitalization has catalyzed financial inclusion in Morocco

Regulatory framework, technological solutions and payment devices. These are the ingredients for the take-off of the digitization so necessary for financial inclusion in Morocco. And mobile payment is undeniably a success factor in reaching the excluded population at a lower cost. These and other ideas were debated by a host of experts, companies and international organizations last week during a new cycle of monthly conferences organized by Maroc Numeric Cluster on the theme “Digitization and mobile payment in the service of financial inclusion”.

The wave of digitalization has come to give a new pace to the process of financial inclusion in Morocco. It has therefore set in motion a new dynamic to ensure equal access to all financial products and services at a lower cost. “Digitization is now perceived as an accelerator of access to financial services. It is also a promising and solid way to overcome the poor penetration of financial services among non-bank populations, “said Sana Tazi, chief executive of Maroc Numeric Cluster. In a new round of monthly conferences held last week, this industry group , with more than 10 years of existence and an ecosystem that brings together digital actors and support structures for the promotion of innovation, has chosen as its theme “Digitization and mobile payment at the service of financial inclusion”.
In front of more than 150 online participants and a packed crowd of startups, SMEs, international organizations such as the United Nations Development Program (UNDP) and the European Bank for Reconstruction and Development (EBRD) and international groups, the speakers they are focused on the real levers of this financial inclusion much sought after by the Kingdom.

And in this process of combating cash, payment institutions have been playing a fundamental role for several years: “We are in this phase in which we must create use, in particular through the dematerialization of flows, but also through the drivers that can be made to create a mobile payment acceptance ecosystem, “underlined Mohammed Benkaddour, general delegate of the Professional Association of Payment Institutions (APEP), bringing together all the companies authorized by Bank Al-Maghrib (BAM) to provide payment services.

Payment institutions: the milestone of 10,000 access points has been passed

Banking Law 203.12 of 24 December 2014 established the status of payment institution which applies to non-bank entities. This same law explains the services that these establishments are able to provide to citizens, in particular the operations of transferring funds, deposits and withdrawals from a payment account or the new possibility of opening an account with a non-bank person and is called ” payment account “. Through this payment account, the person has the possibility to carry out a number of transactions, in particular the payment of invoices, the remote payment and also the execution of direct debits.

Generally speaking, operators fall into two segments: primary paying agents and retail paying agents. The average citizen makes no difference between the two. In this sense, the primary payment agent will provide all services for which a payment institution is mandated or approved by the Central Bank. The retail paying agent is new. “Today you can carry out any type of transaction at a branch of a payment institution. There is a great ability to adapt to the need, that is to say that these are financial services that are easy to understand for a citizen and easy to use according to the needs of this person “, indicates the general delegate of the APEP.
In these establishments, there are opportunities to carry out related financial activities, especially foreign exchange, microfinance through the synergies that exist between the establishments and microfinance associations. “We have already passed the 10,000 access point milestone. The network and access points are set to grow, “says Benkaddour.

3 account levels and a completely free wallet!

The level 1 account is limited, so the risk is limited. At this time, KYC (Know Your Client) is limited to the person’s mobile number via their phone number supported by their application. The holder has a “Ribé” account in which he can receive up to 200 dirhams.
Level 2 account is limited to 5,000 dirhams. And good news: during the Covid period there was a relief from the Central Bank, as the user is content to send a digitized version of his CIN.
For level three, a “quick” interview is carried out at the agency. The customer opens an account with a limit of 20,000 dirhams and free of charge. In practice, nothing is charged for opening this account, and no account maintenance fees are charged.
In any case, the charges are made at the withdrawal level. What price for these operations? “These are competitive fees and I won’t go into the details of this price here, as everyone has their own policy,” says the expert. Finally, it should be noted that the payment account is obviously in the name of a payment institution and is in the name of the user or that of the customer of the payment service.

The EBRD: funding coupled with technical assistance

The strategy of the European Bank for Reconstruction and Development in Morocco is based on three axes: green, financial and digital inclusion. In green, for example, the bank supports the transition to a low-carbon green economy, with green finance accounting for more than 50% of its business. “This is already the case this year in Morocco in terms of inclusion. We seek to promote equal opportunities through access to skills and employment, finance and entrepreneurship and support for women, young people and other disadvantaged communities, ”explains Lamiae Derraji, Principal Banker of the EBRD in Morocco.
In addition, in the context of financial inclusion, two flagship programs for women and young people and digital will be launched this year in Morocco. Last year we launched a study on the digitization of Moroccan SMEs (…) and we concluded that two important areas need to be developed for Moroccan businesses: financing and technical assistance. According to a study by PricewaterhouseCoopers, 81% of companies consider the budget, and therefore financing and in particular external financing, a critical obstacle to their digitization. And the second point, the Deloitte survey showed that 77% of the VSE / SMEs surveyed show the need for technical assistance to help them digitize.

“Women in Business”: a 10% contribution and up to € 1 million in funding

Launched in 2017 by the EBRD, “Women in Business” is the first inclusive program with a new digital component. This program offers a complete package, funding through partner banks in Euros, Dollars or Dirhams. “We also produce local currency, which is a strength for the EBRD. We have also offered a first loss guarantee that allows banks to build a more flexible dedicated offer, taking into account the constraints that women may have to manage ”.

Thanks to this program, some partner banks have granted a kind of grace period to female customers when they have had a child or when they have had something personal to manage during the life of the loan. “Women in Business” provides a guarantee that covers 70% of the loss of each sub-project. Finally, the EBRD offers dual technical assistance. The first benefits to the bank, which the EBRD will help design the product, also for assessing the risks of women entrepreneurs through a “credit scoring tool”. The lender clearly also offers technical assistance to female recipients, then mentoring, coaching and a tool to help them develop a business plan and identify areas to improve their business. “We used the funds from the first loss guarantee, which is equivalent to the guarantee offered by“ Tamwilcom ”, a subsidy of 10% with a maximum ceiling of 30,000 euros per sub-project. The amount of the project can reach up to one million euros ”, explains the rapporteur.

In terms of eligibility, SMEs are targeted first. “The European Union, which is our donor, has a fairly broad definition of SMEs. There are 50 million euros in turnover and 250 employees. Management must be ensured by a woman and all or part of the capital is held by a woman. So what is important to us is that management is the responsibility of women as we really want to have an impact on this goal, ”explains the representative of the EBRD.

Youth Business: EBRD joins forces with “Tamwilcom”
EBRD seals memorandum of understanding with “Tamwilcom”

The EBRD signed a Memorandum of Understanding with “Tamwilcom” in March 2022. Objective: To encourage non-financial services for these young people and for women entrepreneurs. “We have noticed that the partner banks that sign de facto financial inclusion programs with us couple the guarantees of“ Tamwilcom ”with our offers. We therefore raised funds from donors from the European Union, in particular to finance this first loss guarantee, ”stresses Lamiae Derraji, Principal Banker of the EBRD in Morocco.
In terms of eligibility, it is always SMEs that are targeted. Management must be ensured by a young person, therefore under the age of 35 and all or part of the capital is held by a young person. And, of course, the business must be private. “In terms of technical assistance, we will try to strengthen understanding of the youth segment and its needs.”

Technical assistance dedicated to young people under 35

In its endeavors, the EBRD wants the Moroccan banker to no longer be a pure banker, but to be able to provide financing and a full package of advisory services to help the client evolve in his professional practice. “For young entrepreneurs, we still have the Advice Small Business program. A dedicated team is mobilized to offer a lot of advice. And all of this is accompanied by training programs. And an important point for young entrepreneurs is that we want these young people to also be trained on basic concepts in terms of entrepreneurial and entrepreneurial skills on issues in particular of social, operational and environmental sustainability, access to financing and of course digital marketing. But the important thing is this social and environmental sustainability, which informs and crosses all our action ”, the manager specifies.

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