The International Finance Corporation, a member of the World Bank Group, and German group EOS are preparing an investment vehicle that could reach €60 million, equivalent to more than MAD 650 million at the current exchange rate. The mechanism is intended for Morocco’s distressed-loan market.

The development of this market addresses a major challenge for the financial system. Non-performing loans tie up capital and reduce financial institutions’ ability to extend new credit. Their resolution therefore makes it possible to free up financial resources.

The vehicle being prepared by IFC and EOS could contribute to further structuring the secondary market for distressed loans, as part of a broader effort to professionalize debt collection and the management of troubled assets.

Morocco has a relatively deep banking system by African standards. The six major banking groups account for a significant share of the domestic market and also operate regional networks across Africa.

Credit development is essential to financing private investment. However, asset quality remains a key factor determining banks’ ability to sustainably support the economy. Resolving distressed loans helps reduce risks and improve capital circulation.

A new market to strengthen financing

The project comes at a time when corporate financing needs are increasing. Industry, infrastructure, real estate, SMEs and energy projects require significant financial resources.

A more efficient distressed-loan market could therefore indirectly strengthen credit supply by freeing resources tied up in troubled assets and redirecting them toward the economy.

The €60 million vehicle also represents a confidence signal from an international institutional investor in the Moroccan market. IFC traditionally supports the financing and structuring of private markets in emerging economies.

EOS specializes in debt management and collection. The partnership could therefore bring both specialized capital and expertise to Morocco.

The project has a dual objective: improving the quality of financial balance sheets by addressing distressed assets and creating a new asset class linked to discounted loans.