Morocco partners with IFC to bolster supply chain financing

Morocco’s central Bank has teamed up with the International Finance Corporation (IFC) to improve SMEs access to finance through the development of Supply Chain Finance (SCF), which enables both buyers and suppliers to optimize their working capital, improve cash flow, and receive early payment on invoices.

An agreement has been sealed lately between Bank Al-Maghrib and IFC. The two financial institutions agreed to develop a SCF strategy in cooperation with the operators in the Moroccan financial system.

According to financial experts, the move will help to improve Morocco’s financial inclusion and reduce payment deadlines.

“Setting up a favorable environment to SCF will contribute to the emergence of innovative and inclusive financing models for the benefit of ecosystems and enterprises, meeting the development and growth needs of Moroccan SMEs”, said Moroccan central Bank in a press release.

The bank also pledged to continue to work with IFC to remove obstacles hampering growth and prosperity of SMEs by facilitating their access to finance.

SCF provides efficient financing of the value chain. It offers “win-win” solutions for all. If implemented properly, the entire supply chain – buyers, suppliers, and financial intermediaries will stand to benefit from SCF.

Buyers benefit from extended payment terms (aligned to local regulations) and hence, reducing working capital requirements.

Suppliers in turn, benefit from having access to accelerated cash flow at preferential interest rates which allows them to receive payment for approved invoices earlier and at a lower cost.