Paper

Poverty, Access to Credit and the Determinants of Participation in a New Micro-credit Program in Rural Areas of Morocco

Assessing people’'s response to microcredit program in rural Morocco
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This study describes the economic conditions of the population in rural Morocco, and analyzes their response to a new microcredit program. The study is based on results of a randomized impact evaluation of the microcredit program in 16 Moroccan villages. Findings include:

  • Poor people in rural areas diversify their activities to bear agricultural risk, and mainly have access to informal credit;
  • Take-up of the new microcredit program is relatively low, and probability of participation remains quite constant over time;
  • Factors that influence participation in microcredit programs include loan structures, households' credit experience and village concentration;
  • Factors that hamper microcredit outreach include characteristics of microcredit products and eligibility criteria;
  • Most of the population is ineligible for microcredit because they do not engage in cattle rearing or a non-agricultural business.

The study suggests that MFIs must customize their products to the local context by developing individual lending schemes and repayment modalities that are more suited to the production cycle.

About this Publication

By Duflo, E., Crepon, B., Pariente, W. & Devoto, P.
Published