In Moroccan society, households tend to over-indebt themselves with an outstanding amount reaching 411.2 billion dirhams at the end of 2023, an increase of 3.1%. Furthermore, the social classes most affected are employees and civil servants. However, there is an exponential increase in consumer credit and a decrease in housing credit.
Impacts of inflation on borrowers’ credit and solvency. Evolution of household debt. At the end of 2023, it reached 411.2 billion dirhams, an increase of 3.1% compared to the previous year. 34% of credit institutions’ loans, one point less than the previous year.
Banks hold 82% of this debt, compared to 18% for finance companies. In terms of the total amount, the share of consumer credit increased by 2 points, to reach 37% to the detriment of that of housing credit, which contracted to 63%.
Bank Al-Maghrib carried out a combined monitoring of the evolution of household debt, carried with operators with a combined market share of 97% for housing loans and 94% for consumer financing.
Overconsumption
Private debt is the debt of all economic agents (households, businesses, farmers). It is much higher than public debt (before the Covid-19 crisis in 2019, it represented 133% of GDP compared to 97% of public debt) and a loss of control can have a disastrous impact on a country’s economy.
For example, the subprime crisis in the United States in 2007 came from an excess of private debt. Households had taken on too much debt and could no longer repay their loans, which weakened the banking system to the point of causing the collapse of Lehman Brothers. It was this excess of private debt, accompanied by the financial abuses put in place to hide it, that created the 2007 crisis.
Finally, this private debt was transformed into public debt as a result of the bailout of the banks by the States. To this must be added the depressive effect of the crisis on the economy which, with the loss of activity, saw budget revenues decrease on the one hand and, with the rise in unemployment, social benefits increase on the other.
The disaster caused by this excess of private debt was wiped out with public money. The State became an insurer of last resort and now acts as a guarantor of the private sector. This did not prevent swimming agencies, bankers, and commentators from criticizing the States, a few years later, for the increase in their public debts.
