MOROCCO - COVID-19 UPDATE: MEASURES TAKEN BY THE CVE TO RELAUNCH THE MOROCCAN ECONOMY
22/05/2020
The CVE (Moroccan Economic Watch Committee), which met on MAY 21, 2020, introduced the State guarantee mechanism for financing the post-crisis recovery phase for public and private Entreprises negatively impacted by the pandemic.
This system makes it possible to finance the companies working capital requirement with a maximum interest rate of 4%, which represents the BAM (Bank Al Maghrib which is Moroccan central Bank)’s key rate + 200 points. The reimbursement of these credits can be spread over a period of seven years with a grace period of two years.
The purpose of these guarantee products is to mobilize, during the second semester of 2020, the financing necessary to boost a dynamic economy which would positively affect employment and payment terms, and also restore confidence between economic partners. Two new guarantee products are launched:
- "Relance TPE (Very Small Entreprises)": State guarantee that can go up to 95% for loans intended to boost companies’ activity, granted to VSEs, businesses and craftsmen whose turnover is less than MAD 10M. These credits can represent 10% of annual turnover;
- "Damane Relance": State guarantee varying between 80% and 90%, depending on the size of the company. This guarantee covers the credits granted for the activity’s revival for companies whose turnover is higher than MAD 10M DH. These credits’ amounts can reach the equivalent of one and a half months turnover for industrial companies, and one month’s turnover for the other companies. In order to help reduce payment deadlines, 50% of the credit must be used to settle their outstanding suppliers’ debts. This product also covers large companies whose turnover exceeds 500 million DH.
Moreover, in order to relieve VSEs’ treasury during the relaunch phase of the economy, it was decided to accelerate the payment of these companies’ debts from some Public institutions and enterprises affected by this pandemic. A new mechanism is thus put in place:
- The public establishment or the public enterprise draws up the detailed list of its payables,
- The State grants its guarantee for the public entity to raise a loan exclusively dedicated to the payment of said companies;
- The banks grant the credit and takes direct charge of the payments in the benefit of the concerned companies on the basis of the information communicated by the public entity.
The members of the CVE have also discussed the main measures arising from the sectoral recovery plans drawn up by the CGEM and the sectoral federations. These measures have a triple objective:
- Restart the national productive apparatus on healthier foundations;
- Stimulate local demand by encouraging investment and “consuming Moroccan Product”;
- Accelerate the normalization of the economic and social environment of our country.
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