Casablanca – Morocco’s banking sector continued to show steady growth through the first seven months of 2025, with total outstanding credit reaching about $120.3 billion by the end of July. The rise reflects a broad-based increase in financing activity among households, corporations, and financial institutions, even as lenders maintained a cautious stance in some segments of the market.

According to the latest data from Bank Al-Maghrib (BAM), the country’s total bank credit climbed 4.9% compared with the same period in 2024, reaching $120.3 billion. This expansion was driven by a 3.4% rise in loans to non-financial agents and a strong 13.1% increase in credit to financial agents, signaling both robust corporate needs and interbank financing activity.

Corporate lending: Equipment loans lead the way

Private non-financial companies posted a modest 1.2% increase in overall financing, but the composition of loans reveals divergent trends. Equipment loans surged 13.9%, highlighting ongoing investment in production capacity and infrastructure. Real-estate development loans rose 6.3%, showing continued activity in Morocco’s property sector despite signs of moderation. Conversely, cash-flow facilities fell 8.2%, suggesting companies are relying less on short-term credit or facing stricter approval standards for working capital needs.

BAM’s survey of lending conditions for the first quarter of 2025 indicates that banks tightened criteria for cash-flow and property development loans, while keeping conditions unchanged for equipment financing. Lending standards were eased for large enterprises but made stricter for very small, small, and medium-sized enterprises (TPMEs), pointing to a more selective approach that favors bigger, well-capitalized borrowers.

Demand remains solid despite tighter conditions

Despite these tighter conditions, overall demand for bank credit increased. Banks reported that large companies drove most of the growth in loan requests, while demand from TPMEs remained broadly stable. BAM’s second-quarter business survey found that 80% of industrial firms consider access to financing “normal,” compared with 16% who view it as “difficult.”

When it comes to borrowing costs, 74% of companies said credit prices remained stable, while 19% reported an increase. Average interest rates on new corporate loans declined by 26 basis points from the previous quarter to 4.91%, with a notable difference between categories: 4.67% for large companies versus 5.43% for TPMEs.

Household credit shows steady growth

Household lending also maintained positive momentum. Outstanding household credit rose 2.9% year-on-year, supported by balanced growth in housing loans (up roughly 2.9%) and consumer loans (up 3.9%). Lending conditions for both segments eased slightly, encouraging more borrowing for real estate purchases and personal consumption.

Islamic banking products, particularly Mourabaha real estate financing, continued to gain market share. Outstanding participatory financing reached about $2.83 billion by mid-2025, compared with around $2.40 billion a year earlier. Interest rates for new household loans averaged 5.77% in the second quarter, down from the previous quarter. Rates included 6.88% for consumer loans and 4.68% for housing loans, reflecting a generally favorable cost of borrowing for individuals.

Deposits outpace credit expansion

The banking system’s funding base strengthened as deposits grew faster than credit. Total deposits stood at around $134.3 billion at the end of July 2025, an 8.3% annual increase. Household deposits rose 6.4% to $97.8 billion, including $22.1 billion held by Moroccans residing abroad. Deposits from private non-financial companies jumped 9.7% to $23.6 billion, reinforcing liquidity in the system.

Despite this growth, deposit remuneration continued to edge lower. Six-month term deposit rates slipped to 2.16%, while 12-month deposits fell to 2.57%. The minimum savings account rate was set at 1.91% for the second half of 2025, down from the previous semester, reflecting the broader trend of declining interest rates in the domestic market.

Outlook: Balanced growth with selective lending

The latest figures underscore the resilience of Morocco’s banking sector. Strong deposit inflows and steady credit expansion suggest that banks remain well-positioned to support economic growth. However, the tightening of standards for smaller businesses and property development loans highlights a more cautious approach amid global economic uncertainties and the need to safeguard financial stability.

Bank Al-Maghrib is expected to continue monitoring credit conditions closely in the coming months, balancing the goal of sustaining investment and household consumption with prudent risk management. With large corporations leading demand for equipment financing and households benefiting from lower borrowing costs, Morocco’s financial system appears set to maintain moderate but stable growth through the remainder of 2025.