Two leaders of protests against microfinance institutions in Morocco have been sentenced to one year of prison each. In addition, they are to pay fines amounting to nearly 5,000 US Dollars, a judge ruled in Ouarzazate on 11 February. The defence complained about a number of irregularities during the trial.
Amina Morad and Benacer Ismaïni, activists of the Association for Defending Victims of microcredit in Ouarzazate, were given ten days to submit appeals to the court. The two activists had earlier been found not guilty in a previous trial, but were taken to court again by INMAA, a microfinance association linked to PlaNet Finance.
The ongoing protests in the country, whose microfinance sector has still not recovered from a crisis in 2008, might indicate that the Moroccan microfinance industry has trouble containing its overindebtedness problem. Surprisingly, the size of the average outstanding loan to by microfinance institutions in Morocco has risen by 38 percent since the crisis, although more than five percent of borrowers are over 30 days overdue. Before the crisis began, the average borrower owed US$ 543, now they owe US$752.
Indicators of instability in Moroccan microfinance (data: MIX)
(phil)
governancexborders.com 
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February 18, 2014 at 09:34
Milford
Phil, shocking events. The rise in the value of individual loans is worrying because it might indicate a Grameen Bank-style ‘extend and pretend’ strategy is at work – offer a larger loan to potentially defaulting clients on slightly better terms, which is then used to repay the old one and leave a little left over to ‘invest’ or else repay the first couple of installments on the ‘new’ loan. Loan officers like this because it gets them a bonus on a ‘new’ loan and the MFI likes it because the sacred repayment rate is kept high. It continues so long as you have sufficient funds to keep extending or else write-off the loans when they eventually go bust.
February 18, 2014 at 10:06
philmader
Hi Milford, indeed those are the sorts of strategies which might explain these dynamics. We’ll be trying to get more details on the situation in Morocco over the coming weeks.
December 20, 2017 at 18:02
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[…] CADTM and ATTAC began to orchestrate a solidarity campaign. Nonetheless, the two activists were sentenced to prison times and severe fines in […]
December 20, 2017 at 20:41
“We are at the end of our tether!” What African Women are trying to tell the Microfinance Industry |
[…] action, CADTM and ATTAC orchestrated a solidarity campaign; nonetheless, the two activists were sentenced to prison terms and severe fines in […]