February 19, 2020
Business

Moroccan banks respond to king’s call for cheaper SME loans

RABAT (Reuters) – Moroccan banks will offer loans for small and medium sized enterprises and young entrepreneurs at interest rates of not more than 2% in urban areas and 1.75% in rural regions after King Mohammed VI called for easier access to funding. 

In October, the king called on banks to contribute to development efforts in Morocco and news of the new rates came in a joint statement by the finance ministry, the central bank and the GPBM banking industry group on Wednesday. 

Central bank governor Abdellatif Jouahri said earlier that bank loans for SMEs and young entrepreneurs will be refinanced at a preferential rate of 1.25% as part of the same plan, which was developed by the government, the central bank and GPBM. 

The preferential rate is 100 points lower than the central bank’s benchmark interest rate, which has been 2.25% since 2016. 

Under the same plan, the government and commercial banks set up a three-year fund worth 6 billion dirhams ($620 mln) to boost the funding of SMEs and young entrepreneurs and to help curb the informal economy by encouraging access to banking services.

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