As Eid al-Adha approaches, families are unable to repay bank debts amounting to 39 billion dirhams

New data on the financial situation of Moroccan families with the approach of Eid al-Adha, which represents a major consumer occasion that entails important financial burdens, revealed the inability of families to pay bank loan installments amounting to more than 39 billion dirhams (39.1 billion dirhams specifically), while the level of their indebtedness to banks has reached To 386.1 billion dirhams at the end of last March, of which 57.6 billion dirhams were consumer loans.

With the spread of data from the markets about the prices of sacrifices ranging between 4,000 dirhams and 6,000 dirhams, banks and loan companies intensified their credit offers in order to attract the largest number of customers, through consumer loans due within a period not exceeding five years, and with a value ranging between 10,000 dirhams and 30,000 dirhams. This threatens to exacerbate household indebtedness and increase the associated credit risk margin.

In addition to banks, families borrowed 8.7 billion dirhams from microcredit associations until the end of last March, according to the monetary statistics report issued by the Bank of Morocco, in addition to loans worth 79.2 billion dirhams from financing companies during the same period, while the figures of the High Commission for Planning revealed the deterioration of the situation. The financial crisis of these families and the exacerbation of their indebtedness, as the delegation confirmed in its latest research that 42.3 percent of families had depleted their savings or resorted to borrowing during the first quarter of the current year.

Demand engine

The Planning Commission highlighted one of the most important reasons for the worsening household debt: This is related to the increase in demand and the increase in consumption of these families by 1.2 percent during the first quarter of the current year, as the statistical authority confirmed in forecasts issued by it at the beginning of the current year that “domestic demand will be driven by improved spending on consumption,” while it explained “the slowdown in income, which is felt “It is largely affected in rural areas,” with “unfavorable climatic conditions,” and that “it will affect household expenditures, but it will be mitigated to some extent by increasing public transfers.”

Salah Ismaili, a financial analyst, confirmed that the exacerbation of household indebtedness will have negative effects on the national economy in the long term, such as increasing pressure on the balance of national payments, reducing the ability for personal investment, and increasing the burden on families with regard to repaying debts and paying interest, explaining that efforts In order to maintain growth rates at certain levels since the outbreak of the Corona pandemic, the government contributed to stimulating demand for goods and services, which led to a development in personal spending, and thus a growth in the pace of families resorting to borrowing in order to cover their increasing consumer needs.

Ismaili explained, in a statement to Hespress, that the increase in wages, especially in the private sector, during the last period, contributed to reducing the financial solvency of families, enabling them to bear new borrowing costs, which raised their level of debt within a short period, stressing in the same context that families are facing pressures. At the level of personal expenses, such as high costs of living or increasing amounts of money, which has strengthened their resort to debt as a means of financing these expenses, indicating also that the rise in interest rates has not curbed the pace of banks and financial institutions in providing greater credit facilities to individuals, which has facilitated their access to loans.

Growing indebtedness

Families bear heavy financial burdens, which they are not expected to get rid of in the short term in light of the current inflationary context, despite their inclusion in new incentive measures within the social agreement signed between the government and the social parties, which is the review of the income tax starting from January 1, 2025 for wage earners, from During the increase in the first tranche of the table related to net tax-exempt income from 30 thousand dirhams to 40 thousand dirhams, which will lead to the exemption of incomes that are less than 6,000 dirhams per month.

According to Salim Shihabi, a financial and banking consultant, the exacerbation of the problem of household indebtedness could be linked to the effects of inflation and poor income, highlighting that families living in difficult economic conditions face obstacles in meeting their basic needs, and in many cases monthly income is insufficient to cover all expenses, Which forces them to resort to borrowing.

Shihabi explained, in a statement to Hespress, that the increase in the cost of living increases the pressure on families and makes them more dependent on borrowing to meet their needs, with a focus on the costs of health care, education, and housing, which are considered essential. He also pointed out the impact of high unemployment rates on the loss of families’ fixed income, which pushes them to To resort to borrowing to cover the costs of her daily life.

The financial expert concluded by emphasizing that these complex economic and social factors pose a challenge to economic policies and require integrated strategies to reduce pressure on families and enhance their financial stability.