Survey: Nearly One-Third of Moroccans Take Second Loans to Repay Debt

Understanding the phenomenon of indebtedness in Morocco. This is the scope of the survey that the FNAC conducted between September 2020 and February 2021 among 2,082 people (employees, retirees or self-employed). According to the FNAC, indebtedness is "the effective recourse for the rapid acquisition of a good or a consumer appliance". The results of this study show that the pace of household indebtedness in Morocco is indeed slowing down, but in 2017 it represented 30% of the country’s GDP, which "remains very high compared to other emerging economies".

The study report indicates that one household in 3 is forced to borrow or dip into its savings to make ends meet. In total, 25% of respondents say they have taken out a loan to buy a car, while 19% have done so to equip their home and 17% to finance their children’s education expenses. 7% of respondents apply for a loan to finance parties or medical expenses.

The respondents are employees, retirees or self-employed. 67.7% of them have a monthly income of more than 5,000 DH, while the monthly income of 2.4% is less than 1,000 DH. More than half (62.5%) pay installments that exceed 30% of their salaries. 29.3% say they keep less than 25% of their monthly salary after repaying loans, while only 12% say they keep more than 40% of their salary.

According to the FNAC, a person is "legally" considered over-indebted when they have only 35% of their net monthly income left after paying their installments. The most affected people are between 35 and 45 years old. They represent more than 79% according to the survey results. More than half (51.9%) hold at least two consumer loans. 34.70% say they have two loans and nearly a quarter (23.4%) say they have three.

"The survey revealed that the more loans a person has taken out, the more that person seeks to take out new loans regardless of the conditions," the FNAC says in its report, noting that 31% of people who have taken out loans say they have taken out another loan to repay the first. 2 out of 5 people say they have no trouble repaying their first loan. Conversely, 4 out of 5 people say they have repayment difficulties.