A law for microcredit
In 1999, the Moroccan government, after granting around 100 millions Moroccan Dirhams (about USD 120 million) to microcredit associations (AMC’s) through the Hassan II Fund, decided to develop a law related to Microcredit. Law 18-97’s important terms are:
The status of Moroccan microcredit institutions (Art.1): the institutions which also conduct microcredit operations are humanitarian not-for-profit associations governed by a Royal Decree ("dahir") of November 15, 958, and under the supervision of the Ministry of Finance which relies on the opinion of a Microcredit Advisory Council.
The maximum amount of the microcredits granted: an implementation decree has set the operational cap at 30,000 Moroccan Dirhams (MAD’s), even if the law has set the maximum amount of the loans at 50,000 MADs.
The goal of microcredits, as well as the authorized services and sources of funding (art.2): The law limits the granting of microcredit to the income-generating production activities. In addition, in December 2003, a new amendment was adopted which authorized the AMC’s to grant microcredits for the acquisition, construction, and improvement of housing, electrification or drinking water supply. Consumer credits are banned. Only training services are authorized. Additionally, the AMC’s are authorized neither to collect savings (Art.3 and 4), nor to raise funds through operations on the capital market.
The quest for sustainability of Microcredit Associations (Art. 6): “The human and financial means that the association intends to put in place must be sufficient for the realization of its goal”. Section 4 of this same article states that “the financial projections of the association must highlight the long-term sustainability after a period not exceeding five years from the authorization date.”
The tax regime for the microcredit industry (Art.17): During the 5 years following the ministerial authorization to exercise the microcredit activity, the AMC’s are exempted from VAT on the credit operations and from the payment of taxes on the donations in cash and in kind and benefit from duty-free import of equipments.
The Moroccan National Federation of Microcredit Associations (FNAM) (Art.21): The 12 AMC’s authorized to carry out microcredit operations are grouped together by law inside one federation. In 2004, the FNAM board of directors adopted a code of ethics.
Since 2002, a commission from the Moroccan Central Bank elaborated a draft banking law, of which one chapter of is dedicated to the microcredit industry.