SMEs: EBRD grants CIH funding of $ 40 million

To finance SMEs and foreign trade in Morocco, the CIH Bank and the European Bank for Reconstruction and Development (EBRD) are co-deploying 40 million euros (just over 370 million dirhams). This is the third bank in the area to obtain a line of financing. These commitments fall within the framework of the EBRD Solidarity Envelope set up to support member countries and strengthen the resilience of the financial sector during the health crisis.

The European Bank for Reconstruction and Development (EBRD) grants a line of financing of 40 million dollars to CIH Bank in order to reallocate them to businesses. The agreement is in line with CIH Bank’s desire to actively participate in the country’s economic recovery efforts by providing enhanced support to Moroccan SMEs and foreign trade. In detail, “the EBRD will grant a loan of 20 million euros to the CIH to provide medium-term financing to private SMEs, thus increasing the availability of financing beyond the region of Greater Casablanca-Rabat, where 70% of the Moroccan economy is concentrated, ”says the institution, hoping that this will contribute to the rapid recovery of the local economy and strengthen its resilience in the medium and long term. In addition to this financing, the EBRD will provide a trade finance line of 20 million euros to facilitate the export and import transactions of Moroccan companies.

The partnership, the first to be signed between the EBRD and the CIH, will thus support the bank in its strategic orientation towards SMEs by increasing its lending capacity in this sector. This loan is the third granted in the country under the EBRD’s Solidarity Envelope, set up to meet the immediate short-term financing needs of existing clients and to strengthen the resilience of the financial sector during the coronavirus crisis. The first financing package, of 145 million euros, was sent to the Bank Of Africa-BMCE group. The second line of financing was for an amount of $ 100 million to the Banque Centrale Populaire (BCP) to be deployed in the form of loans to local private companies. The support provided to local banking groups is, according to the international institution, a way of supporting bank liquidity as well as the real economy in order to guarantee a certain resilience to SMEs.

The financing package will also be used to increase the line that promotes international trade in order to support Morocco’s imports and exports, which are suffering the effects of the health crisis. These SMEs will benefit, in addition to financial aid, from technical support which will be funded by the European Union and which takes the form of a series of training webinars. Moreover, the EBRD has just launched, in collaboration with the CGEM and the Casablanca Stock Exchange, the first part of a series of 9 workshops intended to reposition Morocco in the post-Covid-19 industrial value chains. The EBRD’s efforts are linked to support this category of companies which constitute the heart of the Moroccan economy, among the most affected by the current health and economic crisis. During the confinement and the state of emergency, the High Commission for Planning (HCP) declared that around 142,000 companies, or 57% of the total workforce, declared that they had permanently or temporarily stopped their activities. Of this total, more than 135,000 companies had to temporarily suspend their activities while 6,300 ceased their activities permanently. According to HCP data, VSEs and SMEs are the most weakened by the effects of Covid-19. These represent 72% and 26% respectively of companies temporarily or permanently shutting down. The big companies monopolize the remaining 2%.

AIDA LO / ECO Inspirations

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