SPTF Annual Meeting 2016: Plenary Day2Notes

The Moroccan Experience with SPM(1 June 2016)

The session provided an overview of the support that Moroccan stakeholders have provided to social performance management in the local market.

Speakers:M. Az El Arab AlamiOuzzani, Centre Mohammed VI; Mohammed El Mazouri, FNAM;YouseffErrami, Centre Mohammed VI, Fatima ZohraBensaid, JAIDA

The local microfinance market:

When comparing figures on a year-to-year basis, there is a clear evolution across indicators:

  • The number of active clients grew from +821,000 to +900,000 from 2013 to 2015.
  • The microfinance sector is one of the most active in terms of number of jobs created.
  • Activities in micro-insurance and micro-assistance have also grown significantly.
  • Money transfers show 86% increase from 2014 to 2015.

In 2009, Morocco was ranked #44 as a microfinance market. By 2015, that rating had gone up to #15. Such growth and improvement was possible thanks to the professionalism of financial service providers (FSPs) and the role of the Central Bank and other organisms that provided a regulatory framework to support the sector.

According to a study conducted by the World Bank in December 2014, the satisfaction rate of microfinance clients in Morocco is higher than those of commercial banks. This was not a surprise for those in the sector, but it was to many outside of it.

While commercial banks have a presence in the richest cities, the Centre Mohammed VI (CMS) has branches in remote and rural areas – which shows their commitment to serving clients who are outside of the regular banking sector in Morocco.

Overview of SPM advancements in Morocco:

There has been a strong focus on client protection and prevention of over-indebtedness, which resulted in:

  • Revamped credit processes -- currently FSPs have to conduct further analyses and processes before giving a loan to a client.
  • Use of responsible pricing according to the results of the MIX -- The price in Morocco is relatively low compared to the global average.
  • Development of laws that regulate the protection of private data.
  • Systems in place for managing complains.

Promoting a responsible sector requires the collaboration of CMS, FNAM, and FSPs.

Overview of Centre Mohammed VI (CMS):

CMS was inaugurated in 2007 during the 10th national campaign for solidarity. Its partners are both national and international organizations,including FNAM, AMC, CréditAgricole du Maroc, OFPPT, JAIDA, Ministry of Economy and Finance, and others (all national), SPTF, Smart Campaign, GIZ, ADA, and Citibank, among others (all international)

CMS facilities include nine training rooms, a library, an observatory, a multimedia room, and several exposition rooms.

CMS has two primary objectives:

  • To support capacity of FSPs by training their staff and their customers.
  • To promote FSPs and the commercialization of their products and services.

CMS conducts all activities in collaboration with FNAM and the FSPs

Components of social responsibility:

  • Client protection – including smart lending, transparency, confidentiality, mechanisms to handle claims.
  • Social performance – balancing social and financial performance of FSPs – in accordance with the six dimensions of the Universal Standards for Social Performance Management.

Promotion of a responsible sector:

  • Partnership agreement between CMS, SPTF, Smart Campaign, GIZ, JAIDA, ADA, among others.
  • Training opportunities – CMS is recognized internationally as a training center in SPM. By the end of 2015 CMS had conducted outreach to +5,900 individuals, in partnership with FNAM and FSPs.

Future projects of CMS:

  • Upcoming opening of a commercial space in Casablanca (“Oasis space”) – a 1400 square meter area with booths and stalls in support of local microfinance, to provide support to clients of FSPs to commercialize their products.
  • Vocational training program
  • Training for evaluators and assessors of the Smart Campaign
  • Roundtables on client protection, risk management, social performance of FSPs

Overview of JAIDA:

JAIDA’s objective is to strengthen its role in supporting the sector in aligning with the Universal Standards for SPM. To achieve this, JAIDA has partnered with key international actors in the sector such as SPTF, Smart Campaign, CERISE, MIMOSA as well as local players.

JAIDA recently developed a report to highlight the activities the organization has engaged in and supported in regards to the implementation of the Universal Standards and the SPI4.

SPI4 benchmarks: The total SPI4 average score for the country is 60.7%

When comparing this score with scores for the rest of Africa as well as for the world, the results are very aligned.

Future plans for JAIDA includes continuing to harmonize efforts in the sector to implement the Universal Standards.

Questions and Answers from the Session:

Q: What is the objective of observatory in CMS?

A: The observatory manages the library and provides resources for research for the university. It also works on gathering data from FSPs and analyzing it and sharing it with the sector. The center in Casablanca will be open to anybody interested in visiting it.

Q: Microinsurance, and more specifically health microinsurance, tends to be the last product to be offered given its risk. Can you tell us more about this product?

A: Microinsurance is relatively new. However, a good number of FSPs are engaging with this product. It began with a microinsurance fund. After conducting a survey in 2010-2011 to understand the microinsurance needs of clients, we found out that health (disease, accidents) was a number one concern. We had to address this need. One of the first challenges we faced was that the insurance product had to position itself in terms of being able to offer something that did not exceed what the customers could pay. Another challenge was providing transportation to those with a health situation. Here is when we turned for help to partners – this helped us develop packages that were within the price that customers could pay. We currently have +100.000 clients. When somebody is in need we send them an ambulance. When an insured person has to be in the hospital, they receive a monthly payment.

One of our partners is AXA Morocco (insurance).

Q: Do you believe there is more potential for growth of microfinance in Morocco?

A: CMS is has presence in many territories, which enables it to serve more than 500 rural communities. We have mobile points of sale that allow us to serve all these remote populations. We are working with regulators on evolving the regulatory framework, for example in access to preferential financing. We would like to have a risk-sharing model with the most remote populations.

Q: In regards of former prisoners, they usually have a hard time resettling into the community and their families. How do you help them?

A: We provide them with the same trainings and benefits that any other client of a FSP would receive.

Q: Is there regulation in place to monitor micro-insurance activity of FSPs?

A: Regulation has evolved with the growth of the sector. In the past, it was the Ministry of Economy and Finance who would provide a license to FSPs to operate. Now, microfinance is considered one of the players of the financial system, which means that the sector is regulated by the Central Bank. However, regulation has been adapted to the microfinance sector in recognition that it does not operate in the same way as other financial institutions.

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Following the session, The Smart Campaign and Microfinanza Rating recognized the local institution Tamwill El Fellah for being the first local organization to be Smart certified for complying with the seven principles of client protection.

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