Morocco Microenterprise Finance Concept Paper

This report presents findings from the Growth and Equity through Microenterprise Investments and Institutions (GEMINI) project on the feasibility of the planned Microenterprise Finance Project (MFP) in Morocco. The study included technical, administrative, financial, economic, and social analysis.

The feasibility study founds large demand for microfinance in Morocco, especially from women entrepreneurs. The report states that methods that have supported large-scale, sustainable financial services for the poor elsewhere, will work in Morocco. Findings include:

• Legal and regulatory obstacles to microfinance exist in Morocco, but they can be overcome;
• A savings instrument must be an integral part of the project;
• Designing and appropriate institutional mechanism will be critical to the project's success;
• Microfinance activities must be managed through an institution, other than banks, such as a private microfinance company;
• Banks must perform back office functions, including transactions and cash management;
• The project should develop methods to enhance women's participation in microfinance.

The study designed a unique model for the MFP in Morocco. This model incorporates elements of other successful microfinance programs, but its institutional and collateral fund structures have been designed specifically for the Moroccan project.