Morocco’s household bad loans reach MAD 44.3 billion, Central Bank data shows

The value of non-performing loans (NPLs) owed by Moroccan households reached MAD 44.3 billion at the end of September 2026, up 5% year over year, according to recent data from Bank Al-Maghrib, pointing to continued difficulties among borrowers in meeting their financial obligations despite a decline in average lending rates during the third quarter.

In its November monthly report on economic, monetary and financial conditions, the central bank said household NPLs accounted for 10.9% of all loans extended to individuals. This means that more than one-tenth of household borrowing was classified as non-performing.

Total bank lending to households increased by 3.5% year over year to MAD 405.5 billion at the end of September. This included MAD 262.8 billion in real estate loans and MAD 63.8 billion in consumer loans, which grew by 2.6% and 5.4%, respectively.

Household NPLs therefore increased at a faster pace than lending to the same category of borrowers, rising 5% annually compared with 3.5% growth in total household credit.

The pace of annual growth in household NPLs had reached 6.7% at the end of August before slowing to 5% in September. Their outstanding balance also declined by 0.8% month over month, indicating a modest monthly decrease despite the continued annual increase.

Housing finance continued to account for the largest share of household borrowing. Of the MAD 262.8 billion in real estate loans, MAD 260.4 billion was allocated to housing loans, which recorded annual growth of 2.6%.

Consumer lending expanded more quickly, rising 5.4% year over year to MAD 63.8 billion, compared with 5.1% growth at the end of August. These loans typically finance purchases such as household equipment and vehicles, as well as other consumer expenses.

The figures raise questions about households’ ability to balance loan repayments with day-to-day spending, particularly among borrowers holding both housing and consumer loans. However, the published data do not specify how many households are experiencing repayment difficulties or provide details on individual levels of indebtedness.

Average interest rates on loans granted to individuals fell to 5.56% in the third quarter of 2026, down three basis points from the previous quarter. The average overall bank lending rate also declined, falling 24 basis points to 4.57%.

The decline covered both housing and consumer loans. Average interest rates on housing loans fell three basis points to 4.50%, while rates on consumer loans dropped 13 basis points to 6.68%.

By contrast, interest rates on overdrafts and cash advances extended to individuals increased 98 basis points to 6.49%.

Lower average lending rates do not necessarily translate into reduced monthly repayments for all borrowers, as the impact depends on individual loan agreements, including whether interest rates are fixed or variable, as well as repayment periods and outstanding principal balances.

Corporate and household bad loans

Bank Al-Maghrib’s report also showed that total non-performing loans across households and businesses reached MAD 105.5 billion at the end of September, up 2.3% year over year. Their share of total bank lending, however, declined to 7.9%, from 8.2% at the end of August.

NPLs owed by private non-financial companies stood at MAD 60.4 billion, recording annual growth of 0.5%, compared with 5% for households.

The NPL ratio for private non-financial companies reached 11.8% of their total borrowing, compared with 10.9% for households. In absolute terms, household NPLs accounted for around 42% of total non-performing bank loans.

These developments coincided with continued expansion in bank lending. Total outstanding bank loans grew 12.2% year over year to MAD 1.333 trillion at the end of September, while lending to the non-financial sector increased 11.2% to MAD 1.084 trillion.

Loans to private non-financial companies rose 13.8%, while household lending grew at a slower rate of 3.5%, highlighting differences in credit growth across borrower categories.

The increase in household NPLs also comes amid changes in the labor market. According to figures cited by Bank Al-Maghrib from the latest labor force survey, Morocco lost 173,000 jobs between the second and third quarters of 2026. The national unemployment rate rose to 10.5%, reaching 12.5% in urban areas.

Labor market developments may create additional challenges for income stability and households’ ability to meet repayment obligations, particularly among borrowers relying on regular wages or professional income. However, the available figures do not establish a direct causal link between job losses and the increase in non-performing household loans.

The data highlight the continued growth of household borrowing, alongside an increase in overdue debt that is outpacing the expansion of credit. This presents challenges for banks in managing credit risk while maintaining access to financing for households.