Public debt and Microfinance in Morocco : When the poor Finance the rich

9 December 2022 by Jawad Moustakbal

Jawad Moustakbal during his presentation on public debt and microfinance in Morocco on 3 December 2022 in Colombo, Sri Lanka

Jawad Moustakbal (ATTAC CADTM Morocco) was one of the CADTM delegates at the 9th CADTM South Asia meeting, in Colombo, Sri Lanka (2-4 December 2022). He presented the damage caused by microcredit and public debt in Morocco for decades.

Jawad Moustakbal began his speech on private debt by detailing the case of Morocco. He first recalled that debt was used as a tool to colonise Morocco. After the country’s independence in 1956, debt was used as a pretext to implement neoliberal policies. Today, Morocco’s debt has doubled compared to its 2012 level and the debt service Debt service The sum of the interests and the amortization of the capital borrowed. represents 10 times the health budget, 3 times the education budget and 7 times the amounts dedicated to public investment.

Jawad Moustakbal explained that the solution found by capitalism to respond to the damage of its austerity policies was microcredit. Faced with the withdrawal of the state, which no longer takes care Care Le concept de « care work » (travail de soin) fait référence à un ensemble de pratiques matérielles et psychologiques destinées à apporter une réponse concrète aux besoins des autres et d’une communauté (dont des écosystèmes). On préfère le concept de care à celui de travail « domestique » ou de « reproduction » car il intègre les dimensions émotionnelles et psychologiques (charge mentale, affection, soutien), et il ne se limite pas aux aspects « privés » et gratuit en englobant également les activités rémunérées nécessaires à la reproduction de la vie humaine. of the basic needs of the population, the working classes were invited to take out loans.

Read also: Colombo Declaration

In Morocco, the microcredit system developed in the mid-1990s. The sector boomed between 2003 and 2007 and loans multiplied. The total amount of credit granted by microfinance institutions multiplied by 11 between 2003 and 2007. Between the same two dates, the number of borrowers increased by a factor of 4.

The microcredit sector then entered into crisis in 2008, with repeated defaults. People in debt had to pay over 40% interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. (for half of the loans granted by microfinance in Morocco), particularly due to the accumulation of microcredits to repay previous ones. However, microcredit organisations hide these informations in the contracts they make people sign.

Read also: Solidarity with microcredit’s victims in Ouarzazate city (south of Morocco)

Three years later, in 2011, there was a massive social movement against the abuses of microfinance in Ouarzazate, Morocco.

Regarding the use of funds lent by microfinance institutions in Morocco, a study showed that 43% of the money is used for daily consumption, not for financing long-term projects.

Jawad Moustakbal

Attac/Cadtm Morocco.

Jawad Moustakbal is the country coordinator in Morocco for the International Honors Programme: “Climate Change: The Politics of Food, Water, and Energy” at the School of International Training (SIT) in Vermont, USA. He has worked as a project manager for several companies including OCP, the Moroccan State phosphates company. Jawad is also an activist for social and climate justice, he is member of the national secretariat of ATTAC/CADTM Morocco, and a member of the shared secretariat of the international Committee for the Abolition of Illegitimate Debts. He holds a degree in Civil Engineering from EHTP in Casablanca.

Other articles in English by Jawad Moustakbal (11)

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