Supporting financial system reforms II

active

The Moroccan economy is reaching its limits with regard to inclusive socio-economic development in all regions of Morocco. Increased activation and dynamization of the private sector can promote income and employment prospects for all population groups. However, inadequate framework conditions and a lack of access to financial services mean that the private sector is currently unable to fully develop its potential. This is where the FC module, which is part of the German-Moroccan reform partnership, comes in. It supports reforms in the areas of financial inclusion, capital market development and financial system stability with the help of a loan totaling up to EUR 450 million (reform financing) to the Moroccan state and in the form of an accompanying measure worth EUR 15 million (transformation support). The reforms have been structured in cooperation with the Moroccan Ministry of Economy and Finance and other actors in the sector (e.g. central bank) in a reform matrix that is designed for three phases (2020-2023). The loan is disbursed based on results. Only when the milestones previously defined for the respective phase have been implemented will a tranche of reform financing be paid into the Moroccan state budget. In total, the matrix comprises 17 reform measures, ten of which have been defined as relevant for disbursement. The aim of the FC module is to support the implementation of the Moroccan reform agenda. This pursues a socially inclusive development model through improved framework conditions for investments and easier access to financial services for private individuals (especially vulnerable population groups) as well as domestic and foreign private companies. In addition, the reform measures benefit the entire Moroccan population by benefiting from improved economic framework conditions and sustainable economic growth.