Morocco Reports 22% Drop in Business Failures Amid Pandemic Measures

In a study called "Defaillances Maroc 2020: Une année exceptionnelle", Inforisk reported that "between 2019 and 2020, business failures experienced a historic drop of 22%, the largest drop since we have been measuring this indicator". This feat is the result of the slowdown in the activity of commercial courts, which almost continuously stopped their activities from March to September 2020, between the general lockdown and the judicial holidays, Inforisk said, noting that judicial activity has resumed as best it can since September, but disrupted by the health situation the country is going through.

This success is also linked to the exceptional measures put in place by the State in 2020. Among others, the Covid Fund of 35 billion dirhams (MMDH), state-guaranteed loans with Damane Oxygène then Damane Relance and TPE with 70 MMDH distributed to companies, credit deferrals, tax payment deferrals, CNSS benefits and partial unemployment.

Even if "all these measures have kept thousands of companies on life support, some of which would not have survived without state aid," the study shows that the consequences of the crisis on companies have been very visible, especially with the temporary cessation of activities, the reduction in working time, layoffs and staff reductions.

In addition, for 2021, the Inforisk study anticipates a more difficult decline, with the cessation of state aid, including Damane Relance/TPE and the obligation to start repaying debts contracted in 2020 or deferred payments.