Green finance: launch of a new study for Moroccan SMEs

A study on the accessibility and diversity of financial offers available to SMEs in Morocco, and their potential to accelerate Morocco’s transition to a green economy, conducted by the Ministry of Economy and Finance in partnership with FSD Africa and FSD Africa. British Embassy in Morocco.

The Ministry of Economy and Finance of the Kingdom of Morocco, together with its partners FSD Africa and the British Embassy in Morocco (Overseas Commonwealth Development Office), has conducted a study on the accessibility and various financial offers available to SMEs and MSMEs in Morocco, and on the capacity of these companies ( which represents 93% of all companies in the country and employs 46% of its workforce) to accelerate the transition from Morocco towards a green economy,” the ministry notes on its online portal.

The supply of green finance has increased in the Kingdom, with several offers emerging in recent years to support green projects, as the same source points out, indicating that there is an increasingly developed ecosystem of actors capable of stimulating the growth of innovative Moroccan small businesses through debt and equity. and grants, whether public institutions mandated to support Moroccan businesses, regional and continental development finance institutions or local commercial banks. However, in the face of the growing demand for green financing instruments, additional effort must be made through innovative financing systems to bridge the financing gap.

The conclusion of the study indicates, in this sense, that the country’s commitment to sustainable financial growth will require close collaboration between the various stakeholders, noting that FSD Africa will contribute to the design of a new financial instrument that will increase the availability and accessibility of green finance for Moroccan SMEs, after publishing this the study.

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Thus, in line with Morocco’s updated Nationally Determined Contributions (NDCs), SMEs are expected to play an important role in achieving Morocco’s NDCs, with around 40% of mitigation measures (US$15.5 billion) and 55% of adaptation measures (US$22 billion). American dollar). ) are carried out by small and medium-sized companies, either directly or through subcontracting with large companies.

The Minister of Economy and Finance said, “We note with satisfaction the importance of this study, which covers the analysis of supply gaps and needs of green finance targeting SMEs to design a new tool that can meet the unmet demand of SMEs for green finance.” Nadia Fattah.

And he adds: “In fact, this work comes at the right time to support efforts to implement the Kingdom’s strategic direction aimed at making sustainability a pillar of development. In this regard, we would like to acknowledge the support of British cooperation in conducting this study.”

For his part, the UK Ambassador to Morocco, Simon Martin, noted that “in March 2023, the UK published its updated Green Finance Strategy. This underscores the growth opportunity presented by the transition to net zero for businesses, particularly small and medium-sized businesses, and the need for dedicated support. It also highlights the work of FSD Africa in Morocco, which is already helping to stimulate capital flows for green economic growth.” And to continue: “I am delighted that with this study, we can take another step in supporting Morocco’s thriving green economy and further expand our financial cooperation the couple”.

In turn, the CEO of FSD Africa, Mark Napier, explained that “Morocco’s potential as a green economy is very promising, but it is imperative that the country’s economic backbone – small and medium enterprises – be encouraged and supported in their efforts to engage in green projects and activities. Only through Designing a green financing system that can achieve the kingdom’s green aspirations. This study constitutes an important and timely intervention that we hope will spark discussions among policymakers, legislators, private capital actors and other stakeholders.”

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The GAP analysis provided a clear picture of the areas requiring action within the green finance space. Some major industries—such as construction, transportation, and power generation—have strong “greening” potential but are underserved by green lines of credit, while areas such as agriculture are well covered, emerges from this study. In addition, key sectors such as fisheries and sustainable habitats remain virtually untouched by green financing offers and must be considered. Finally, the study emphasizes that there are no major instruments such as green insurance and guarantee products, or investment funds designed exclusively for green activities.

The study makes a series of recommendations in areas ranging from public awareness, regulation and taxation, to technical assistance and technology, among others.

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