MA Capital Market Development & SME Finance DPL

closed

Closed

This program document proposes a First Capital Market Development and Small and Medium-Sized Finance Development Policy Loan Program (DPL) in the amount of Euro 217.6 million (US$300 million equivalent), which will be the first of a programmatic series of two single-tranche DPLs. It supports policies of the Government of Morocco (GOM) to adapt the financial system to the evolving needs of the real economy, develop market-based finance to complement banking in providing financing solutions and services to Moroccan enterprises and projects, and achieve higher growth through a better allocation of capital. Morocco has invested 30-35 percent of Gross Domestic Product, or GDP per year for the past 15 years, significantly more than peer countries, but this has not yet translated into higher growth. Total factor productivity, the key metric of competitiveness, lags behind peers, possibly reflecting the fact that public investment has been directed at long-gestation projects, in hospitality, phosphate extraction, energy, and infrastructure (highways, ports, airports, dams, free trade zones, etc.). The financial system is already large by international standards, most importantly because of large long-term saving locked in pension and insurance. The banking system is also large, with already commendable penetration of small and medium enterprises (SMEs) and low-income households. The financial system has performed well in mobilizing resources for investment. In future, the contribution of finance to growth hinges on enhancing the way it allocates and monitors these resources.

FY17 - Financial Sector,FY17 - Industry, Trade and Services,FY17 - Public Administration

World Bank Group

Project

Fertilizers, Manufacturing (Industrial), Seaport, Road, Government