Morocco is preparing a new law that would allow banks to sell unpaid loans worth more than 100bn dirhams ($10bn). The move aims to reduce pressure on banks and help them lend more money to households and businesses.
Data shows that unpaid loans held by Moroccan banks have reached about 100.5bn dirhams. These debts make up around 9% of all bank loans in the country.
Over the past ten years, the amount of unpaid loans has grown by 62%, partly due to economic shocks such as the 2020 pandemic and repeated droughts.
The new law would allow banks to sell these unpaid loans to specialist debt collection companies or investment funds.
At the moment, legal rules make it difficult for banks to remove these debts from their accounts.
Selling the loans would allow banks to get some money back quickly and clear risky debts from their balance sheets. This could improve their financial position.
Officials say the reform could help banks lend more money to the economy.
When banks hold large amounts of unpaid loans, they must set aside money to cover possible losses. This limits how much they can lend.
By selling these debts, banks could free up funds that could be used for new loans to small businesses, companies and home buyers. The plan could also reduce pressure on Bank Al-Maghrib, Morocco’s central bank.
During periods of financial stress, the central bank often provides extra liquidity to support banks.
A market for selling unpaid loans could help banks manage their problems on their own by selling troubled debts to investors.
Banks would sell packages of unpaid loans at a lower price than their original value.
For example, a debt worth 100 dirhams could be sold for around 40 dirhams. The buyer then tries to recover more than the amount paid by negotiating with the borrower or using legal action.
In some cases, groups of loans could also be turned into financial products that investors can buy.
Officials say the aim is to stop unpaid loans from becoming a bigger risk for the banking system while helping banks focus on lending to the wider economy.
