Morocco recorded a 13% increase in non performing loans
Meanwhile, banks have reduced new lending.Bank Al-Maghrib, the central bank of Morocco, has revealed that the total amount of outstanding loans in the kingdom has increased by about 1.5 billion dirhams (€136.6 million) in March.
Non-performing loans have increased by 13 per cent between March 2015 and March 2016 to reach nearly 60 billion dirhams, which represents 7.7 per cent of outstanding bank loans.
Meanwhile, banks are more reluctant to grant new loans to businesses. "The decline of credit and the rise in nonperforming loans are linked to the slowdown in economic activity and difficulties experienced by large groups such as La Samir or Alliances," said a banking source quoted by Jeune Afrique newspaper.
He added: "The lack of new credit can also be explained by a lack of confidence in the economy."
This increase in outstanding loans comes two years after Bank Al-Maghrib lowered its key rate to bring it from 2.75 per cent to 2.5 per cent - the lowest rate in twenty years - in order stimulate the provision of credit to households and businesses.