• Home
• News Article

Morocco: World Bank Approves a US$200 Million Loan to Support the financial sector

WASHINGTON, December 15, 2005 - The World Bank Board of Directors approved today a loan of US$200 million to support the financial sector reform policies undertaken by the Moroccan Government.

The aim of the Financial Sector Development Policy Loan is to foster the emergence of an efficient financial sector that better supports Morocco's development and growth objectives, to promote an enabling environment for financial intermediation and risk management, and to boost the private sector's role and participation in the provision of financial services.

The Financial Sector Development Policy Loan will help strengthen the legislation, regulation and supervision of the financial sector through the establishment of a legal and regulatory framework in line with international standards so as to improve financial intermediation and mobilize savings through improving the legislation, regulation, and supervision of the banking and insurance industries, and of financial markets. The project will also seek to restructure specialized public financial institutions in handling their stock of non-performing assets and to bolster their role in the financial sector. In so doing, the project will help to: i) support the efforts already undertaken by the authorities to liquidate the Banque Nationale pour le Développement Economique, ii) clarify the strategic positioning of Crédit Immobilier et Hotelier (CIH) and ensure its compliance with prudential ratios by addressing the burden of non performing loans. In the framework of this operation, the authorities have already embarked on carrying on the institutional, operational and financial restructuring plan of Crédit Agricole (CA).

Another dimension to the new loan is that of improving the infrastructure, transparency, and integrity of the financial sector by i) modernizing payment systems; ii) strengthening anti-money laundering and terrorism-financing measures; and iii) enhancing the quality of financial information.

"This Financial Sector Development Policy Loan is in line with the diagnostic and recommendations of the Morocco Financial Sector Assessment carried out in 2002" commented Samir El Daher, the Project Task Team Leader. "While some challenges still remain, the loan approved today by the Board of Directors represents an important step forward in the establishment of a more efficient financial sector, one with greater capabilities to play a role in the financing of growth in a set-up where market variables have an increasing role in the Moroccan banking sector".

The Financial Sector Development Policy Project squares neatly with the Bank's Country Assistance Strategy for the Kingdom of Morocco (CAS) for the period 2005-2009 which was approved by the Board of Directors on May 19, 2005, and whose goal is to support growth-oriented policies and strengthen the capacity of the financial sector to fund corporate sector activities. The project is in line with the first strategic objective of the CAS, which consists of improving competitiveness and the investment climate, and more specifically, addresses another expected outcome of the CAS--that of strengthening a growth-oriented financial sector. The project also addresses other governance objectives set forth in the CAS.

For more information on this project, visit: http://www.worldbank.org/projects

For more information on the World Bank's work in Morocco, visit: http://www.worldbank.org.ma

-Ends-

Contacts:
In Washington:
Zeina El Khalil (1-202) 458-4417
zelkhalil@worldbank.org

In Rabat:
Najat Yamouri
(212-37) 63 60 50
nyamouri@worldbank.org

© Press Release 2005