Facing a continuous rise in non-performing loans on Moroccan bank balance sheets, the International Finance Corporation (IFC) and German group EOS Holding are preparing an investment vehicle worth up to 60 million euros. The operation aims to create new capacity for buying and managing distressed assets while helping a secondary market for bad debt emerge in Morocco.
The IFC, the World Bank Group’s private-sector financing arm, is considering partnering with EOS Holding GmbH to set up the vehicle, called “DARP NPL EOS Morocco,” worth 60 million euros, or roughly 650 million dirhams. The project still needs approval from the IFC’s board, with a review scheduled for October 15, 2026. Under the proposed structure, each partner would contribute up to 30 million euros in equity, with the vehicle set to acquire portfolios of non-performing loans from Moroccan financial institutions spanning individuals, small and medium enterprises, and large companies, and to potentially handle real estate assets banks have recovered through debt-collection procedures.
The operation comes amid persistent growth in bad debt. Per Bank Al-Maghrib data, non-performing loans on bank balance sheets reached 102.3 billion dirhams at end-2025, up 5 percent year-on-year, with the latest monetary statistics putting the figure at 105.97 billion dirhams by end-May 2026. On a consolidated basis, non-performing loans across Morocco’s eleven banking groups reached 141.7 billion dirhams at end-2025, tying up regulatory capital, requiring provisions and limiting banks’ capacity to direct resources toward new financing.
The project also comes as Morocco works to establish a secondary market for distressed debt, with draft legislation governing the direct transfer of bad loans submitted to the government’s General Secretariat, while Bank Al-Maghrib continues work on the fiscal, judicial and prudential aspects needed to create the market. For the IFC, the initiative would mark its first operation in Morocco under its Distressed Asset Recovery Program, aiming to help structure an ecosystem specialized in acquiring, valuing and recovering troubled debt.
EOS, owned by Germany’s Otto Group, has specialized for decades in acquiring and managing distressed debt, and its expertise could also benefit local debt-collection firms and law practices through knowledge transfer. If the IFC approves in October, Morocco would gain a first vehicle combining international capital with specialized expertise to tackle its stock of distressed banking assets.
