Banks in Morocco could soon have a new way to deal with unpaid loans. The International Finance Corporation (IFC) and German company EOS are planning a €60m fund to buy non-performing loans from financial institutions. The project, called DARP NPL EOS Morocco, has not been approved yet. IFC has listed it as “Pending Approval”, with a board decision expected on 15 October 2026. IFC and EOS Holding GmbH would each invest up to €30m in the vehicle.
The fund would buy several types of troubled assets, including unpaid consumer loans, debts owed by small businesses and companies, and properties already held by banks after borrowers failed to repay their loans.
The real estate part is important because the project is not limited to bad loans. It could also cover homes, offices, shops or other properties that financial institutions have taken over. IFC has not said where these properties are or what type of properties they are.
Banks in Morocco have more than 100bn dirhams ($10bn) in non-performing loans, according to the figures provided in the project material.
Non-performing loans make up about 8% to 8.3% of total bank credit.
The problem is bigger in some parts of the economy. Non-performing loans among private non-financial companies stand at 12.9%. The rate for household loans is 10.7%.
Bank Al-Maghrib is working on a secondary market for these loans. Such a market would allow banks to sell unpaid loans to specialist investors instead of keeping them on their books.
The central bank sees the issue as a priority for the banking sector.
“The issue of non-performing loans stands out as one of the priority projects for the Moroccan banking sector. Bank Al-Maghrib, in coordination with its partners, is working to accelerate the establishment of a secondary market allowing the transfer of these debts to specialized investors,” Governor Abdellatif Jouahri said.
The planned market would give banks more room to remove bad loans, free up capital and lend again.
EOS is part of Germany’s Otto Group and has worked in debt collection and distressed assets for more than 50 years.
The company buys unpaid debts and manages portfolios of troubled assets. It also works with properties recovered by financial institutions.
EOS operates in 24 countries and employs more than 6,000 people, according to the project information.
The proposed fund could therefore change who manages some unpaid loans. Debts currently held by banks could move to a specialist investor, which could then seek repayment, restructure the debt or recover the underlying assets.
The project would be IFC’s first investment in Morocco through its Distressed Asset Recovery Program (DARP).
DARP was created to help banks in emerging markets deal with non-performing assets. The programme has invested and mobilised more than $10bn globally and has helped offload more than $49bn in non-performing loans, based on the figures provided.
The €60m project is still awaiting approval.
If the IFC board approves it in October, the fund would give banks another option for dealing with unpaid loans and properties recovered from borrowers.
