Banks’ "Free" Loan Deferrals May Come with Hidden Costs, Experts Warn

According to l’Economiste, the moratorium on receivables is debated due to an ambiguity around the "free" deferral of maturities. "If no application fees are charged, additional or "intercalary" interest would be applied, thus increasing the cost of credit.

By deferring the credit during this period, the customer mechanically increases the cost of his credit. According to the same newspaper, the interest, as long as it is not paid, is considered by the bank as the remaining capital due. "So if this capital increases, the interest does too," it is indicated.

For Idriss Bensmail, Deputy Managing Director of the Moroccan Bank for Trade and Industry (BMCI), no increase in the contractual rate is applied. "However, for clients who request an extension of the credit term by 3 months, the deferred installments will be added to the capital and will be productive of interest," he confirms. To this is added the cost of the borrower’s insurance. Furthermore, the deferral of maturities does not mean that the credit is interrupted.

It should be noted that as of April 24, requests to defer the repayment of bank loan maturities and those related to leasing credits amount to 416,000 requests, with the exception of 5% of the requests that have been rejected. The total cost of these deferral requests is estimated at 33 billion dirhams.