Regulatory Framework and Supervisory Authorities in Microcredit Sector: A Comparative Analysis

Abstract

The microcredit system in Morocco is considered one of the best and most advanced in all North Africa. It is regulated by Law No. 18-97 (published in the Official Gazette of 1 April 1999), whose art. 1 establishes: “Microcredit associations are those created in compliance with the provisions of Dahir No. 1-58-376 of 3 January (15 November 1958), which regulates the right of association aimed at providing micro-loans”. Articles 2 and 3 of Law No. 18-97:

• Define micro-loans as loans granted to economically disadvantaged individuals and aimed at starting or supporting enterprises, achieving thus their economic inclusion (art. 2);

• Set the maximum amount of micro-loans (established with special decree) in the amount of 50,000 Dirhams (DH, around 5,000 USD, art. 2);

• Establish that non-profit associations created pursuant the 1958 Dahir Act are entitled to engage in the microcredit business;

• All microcredit associations must be authorised by the Ministry of Finance to carry out the microcredit business as well as all complementary and instrumental activities, such as training, technical support and assistance, but they cannot engage in traditional banking services by receiving public money on current account, savings or similar (in accordance with article 2 of the Dahir No. 1-93-147 of 6 July 1993).

Although the chapter has been prepared by the authors jointly, sections 2.1, 2.2, and 2.5 were written by Pasqualina Porretta, section 2.3 was written by Ida C. Panetta, section 2.6 was written by Paola Leone, and 2.7 was written by Fabiomassimo Mango; sections 2.4 and 2.8 were written by Paola Leone and Pasqualina Porretta.