Morocco lifts microloan cap to expand access for small enterprises

Morocco has approved a long-anticipated decree to raise the ceiling on microloans, marking a key shift in its microfinance strategy aimed at expanding access to credit for very small enterprises and low-income individuals. 

The measure, part of Decree No. 2.25.450, implements provisions of Law 50.20 and seeks to modernize a sector long criticized for lagging behind the country’s evolving economic realities.

The updated framework allows microfinance institutions to adjust loan caps based on their financial capacity and the category of borrower, moving away from the long-standing MAD 50,000 ceiling, unchanged since 2019. 

The government says the new rules will better align microcredit with the cost of launching income-generating or service-based projects, particularly amid inflation and post-COVID economic pressures.

Official figures show the sector reached MAD 9.3 billion by end-2024, serving 778,000 clients, nearly half of them women.

 Yet experts say the figures mask deeper issues. Economist Mohamed Adil Ichou notes over two-thirds of funding is concentrated in individual loans, with only a fraction reaching productive small businesses. 

He also flags the limited employment footprint of the sector, which counts just over 7,500 direct jobs.

Ichou warns that unchanged loan caps and high market concentration, 98% of loans controlled by four institutions, undermine both financial inclusion and sector competitiveness. 

While the shift toward transforming microfinance NGOs into joint-stock companies may enhance governance and attract investment, he cautions against mission drift from social impact to profit maximization.

Legal scholar Badr Zaher El Azraq called the decree “a necessary reset,” saying the previous credit model was out of sync with Morocco’s economic dynamics. 

He urged stronger project oversight and repayment support to avoid turning microloans into a debt trap for small investors.

The decree is a critical step, but insufficient on its own, he said, advocating for  scaling loan ceilings, diversifying market actors, prioritizing business loans over personal credit, and rigorously measuring long-term economic outcomes.