Morocco’s Central Bank Unveils New SME Loan Refinancing Guidelines Amid COVID-19 Crisis

To frame the refinancing mechanism for loans granted by banks as part of the SME support program. This is the objective of the circular issued by Bank Al-Maghrib on April 15. It sets the terms of refinancing of loans. This circular is the materialization of the commitment made on March 29 by Bank Al-Maghrib, to support households and businesses, particularly SMEs, through access to bank credit in order to mitigate the consequences of covid-19.

The beneficiaries of the SME support program are companies with an annual turnover excluding taxes of less than or equal to 200 million dirhams. Real estate development companies and liberal professions are excluded. A refinancing line for new disbursed loans for SMEs that have not benefited from refinancing from BAM as part of the integrated business support and financing program is being set up. It extends over a period of two years.

In the form of guaranteed loans for a period of one year, Bank Al-Maghrib supports the monthly refinancing of banks participating in the program, at a refinancing rate equal to the weighted average of the key rate over the refinancing period. The support corresponds to the maximum or equal amount of the loans disbursed during the previous month. No later than the 15th of the month following the end of each month, the statement of eligible loans under this program and disbursed during the same month must be communicated to BAM by the banks.

To support access to credit, BAM has adopted new monetary and prudential policy measures with the aim of tripling the refinancing capacity of banks. To this end, BAM offers the possibility for banks to use all the refinancing instruments available in dirhams and in foreign currency. Banks can obtain an extension of the duration of financing and the extension to a range of securities and effects with BAM.