Morocco plans market for non-performing loans

Morocco has announced its plan to develop a market for non-performing loans (NPLs) that would reportedly be geared towards increasing stability in the country’s financial sector and improving the balance sheet of banks, according to the North Africa Post, a Moroccan government-friendly publication, on March 27th.

The plan would reportedly involve the development of a market where banks would be allowed to buy and sell loans that have not been paid on time and that have exceeded the set period for payment.

The project has been in development by the North African country’s central bank, Bank Al-Maghrib, since 2022, and it has now intensified its efforts in the development of the legal and regulatory framework for the project, which has also been supported by the International Finance Corporation to ease procedures and to make sure that guarantees that are linked to the loans are given to buyers, automatically.

Abdellatif Jouahri, the central bank governor, said non-performing loans represented about 8.2 percent of the total banking assets by the end of 2025, which is considered relatively high in comparison with other countries in the world. This has been affecting the bank balance sheets and has been limiting institutions ability to provide new credit.

The development of the market for non-performing loans is aimed at helping banks get rid of the non-performing loans more easily. This might improve the liquidity of the banks and enable the banks to provide more credit to the economy. It is also aimed at reducing the systemic risk associated with the relatively high levels of distressed debt in the banking sector.

This is part of the efforts aimed at modernising the country’s financial sector and bringing it in line with international practices. It is also reportedly necessary for protecting the rights of borrowers, especially with regards to the protection of personal data in the process of the transfer of ownership of the loans.

North Africa Post, Maghrebi.org