The loan also aims at improving the regulatory oversight of the banking sector and supporting the capital market development by broadening the range of instruments and strengthening the protection of Moroccan investors, the World Bank said in a statement.
The program also addresses the financial sustainability of the civil service pension fund, thereby preserving its role as a major institutional investor, said the World Bank, adding that the loan will “unleash new financing solutions for small enterprises and the real economy more broadly”.
The loan is also intended to boost efforts aiming at enhancing the stabilization of the finances of the Caisse Marocaine des Retraites, the mandatory pension fund for civil and military services. This controversial reform of the pension system will start by raising the retirement age as well as contributions to guarantee the pension promises made by the state.
“The reform raises immediately the minimum pension payments for those at the lower end of the salary scale to protect the least well-off retirees and women survivors,” the World Bank said.
“Morocco has made significant progress over the past two decades in modernizing its financial system and creating an environment conducive to private sector development,” Marie Francoise Marie-Nelly, World Bank Country Director for the Maghreb and Malta was quoted as saying.
“Global experience shows that private initiative is the engine of job creation, and better access to finance for SMEs, along with other financial inclusion efforts while safeguarding financial stability, will help unlock the immense potential of Morocco’s youth and women,” the World Bank official said.