On an annual basis, growth in outstanding loans to the private sector slowed down from 4% in January to 3.8% in February according to Bank Al-Maghrib statistics. The slowdown in loans to households was only partially offset by the slight acceleration in lending to businesses. Soaring raw material prices and logistics costs exacerbated by the war in Ukraine are once once more putting a strain on companies’ cash flow.
The noticeable return of inflation will not be neutral on the bank/customer couple. Even if a large part of the shock on purchasing power is absorbed by the Compensation Fund, the much more difficult end of the month for some households might increase requests for overdraft facility or overdraft. Outstanding accounts receivable exceeded 24 billion dirhams at the end of February, up 2.8% over two months and 9% over one year. As for consumer credit, its growth remained stable at 2.9% in February over one year at 55 billion dirhams.
“Household consumption should maintain a positive trend, benefiting from the generally favorable behavior of the main income barometers, including commodity price subsidies, consumer credit and transfers from MREs”, estimates the DEPF.
Transfers from MREs would reach 79 billion DH in 2022 according to Bank Al-Maghrib forecasts. At the start of the year, household investment in the form of home purchases is holding up with growth in outstanding housing loans of 4.4% in February year-on-year. On the other hand, the pace decelerated slightly compared to January when growth stood at 4.9%. Business continued to benefit from a relatively favorable interest rate and price environment. But clouds are looming on the horizon.
The probability of a rise in reference rates, which cannot be completely ruled out, and the surge in the prices of building materials might affect the behavior of housing loans. “The prices of new homes might increase by 20 to 30% if the inflation of building materials continues,” warns a real estate developer.
Business credit holds steady
Loans from banks to private non-financial companies totaled 404 billion dirhams at the end of February, up 3.8% over one year once morest 3.6% in January. Growth is driven by cash loans, the growth rate of which accelerated from 6.2% in January year-on-year to 6.7% in February. Soaring raw material prices and logistics costs exacerbated by the war in Ukraine are once once more putting a strain on companies’ cash flow.
This context has led the government to take new measures to help them. This is the raising of Tamwilcom’s guarantee commitment ceiling per operation and on the same company to respectively 15 million and 30 million DH. This adjustment will allow companies to cover financing up to 50 million DH once morest 33 million DH previously. In addition, the banks will reschedule Covid loans in order to relieve companies.
The uncertainties surrounding the economic outlook are weighing on the morale of business leaders a little. The pace of growth in equipment credit decelerated between January and February, dropping from 3.7% to 3%. The context also leads to an increase in claims, with non-performing loans showing an increase of 8.9% at the end of February over one year once morest 3.3% in January.
Frank Fagnon / ECO Inspirations
