Moroccan Banks Split on Loan Moratorium Terms, Borrowers Face Higher Costs

The consideration of the deferred payments during the moratorium is the problem that currently arises for the banks, reports the newspaper l’Economiste. In this regard, the Central Bank has specified to the banks in the West African Economic and Monetary Union (WAEMU) area, that the granted moratoria will be lodged in a special account reserved for operations related to covid-19. A provision that would not apply in Morocco, explains the daily, according to which no application fees are charged. However, the extension of the repayment period generates additional interest and increases the initial cost of the loan.

In practice, the banks would put together the payment deferrals to the principal amount of the debts; which means that the interest to be repaid will be recorded on these principal amounts, added to the deferred interest. A rise in the bill to be paid by the debtors upon resumption of payments is the direct consequence of this practice.

Idriss Bensmail, Deputy Managing Director of the Moroccan Bank for Trade and Industry (BMCI), stated: "We do not apply any increase in the contractual rate. However, for customers who request an extension of the loan term by 3 months, the deferred installments will be added to the capital and will be interest-bearing," to which the cost of the borrower’s insurance must be added, he specified.

Furthermore, 416,000 requests for deferral of interest payments have been submitted by various categories of people for a total amount of 33 billion dirhams. 95% of these requests have received a favorable opinion.