Household debt grows as regulators warn burden is unusually high for an emerging economy 

Bank Al-Maghrib said loans granted to households rose by 3.5% year-on-year by the end of the first five months of 2026. On the surface, that points to steady demand for credit as families continue to borrow for everyday expenses, major purchases, or unexpected costs.

But regulators have repeatedly warned that the country’s debt levels are becoming unusually high for an emerging economy.

According to Bank Al-Maghrib, total household debt reached MAD 427 billion, with 35% of that made up of consumer loans. That puts household debt at around 27% of Morocco’s GDP.

Although the ratio has fallen from 32% in 2020, the decline does not mean families are borrowing less. Household debt has

continued to grow every year, rising from MAD 386 billion to MAD 427 billion. The ratio fell simply because the economy expanded faster than household debt.

Economist Mohamed Jadri said household debt cannot be judged by its share of GDP alone. What matters most is whether families can afford to repay, based on their incomes, savings, and job security. Even lower debt levels can become a heavy burden when incomes are low and savings are limited.

The annual growth rate of consumer credit accelerated from 6.1% in 2023 to 7.9% in 2024. Analysts point to several reasons behind the increase, including wages that have struggled to keep pace with living costs, easier access to unsecured loans, rising expenses linked to the school year, and stronger competition among lenders offering consumer credit.

For many households, borrowing has become less about buying new appliances or financing a car and more about covering day-to-day expenses.

Jadri said part of the rise in consumer loans is being driven by higher living costs, with some households borrowing just to keep up with everyday expenses. He warned that if borrowing continues to grow faster than incomes, more families could struggle to repay their loans.

Bank Al-Maghrib’s own review of 439,780 credit files in 2024 found that 32% belonged to households whose debt repayments exceeded 40% of their monthly income.

Within that group, almost four in ten households were spending between 40% and 50% of their income on debt repayments.

Around a quarter fell between 50% and 60%, while 23% had debt burdens exceeding 70% of their monthly income which is a level considered critical because it leaves very little room to absorb financial shocks.

When households reach that point, borrowing often becomes a way to stay afloat rather than improve living standards.

Jadri said that this is a worrying indicator because it suggests that some households devote more than two-thirds of their income to repaying loans and other financial obligations.

“If an economic shock were to occur, such as job loss, lower income, or another increase in prices, these households would be the most vulnerable to falling behind on repayment,” he added.

Regulators say this can create a vicious cycle in which families rely on repeated overdrafts, miss bill payments, and take out new loans simply to repay existing ones. Instead of reducing debt, each new loan can deepen financial pressure.

The banking sector is already seeing signs of that stress.

Debts that borrowers are struggling to repay reached MAD 44.6 billion  in 2024, an increase of 6.7% after rising 6.4% the previous year. That pushed the household credit risk ratio to 10.5%, meaning repayment difficulties are becoming more widespread.

The High Commission for Planning (HCP) found that 42.1% of Moroccan households have to either borrow money or use their savings just to cover everyday expenses.