Casablanca – Bank credit in Morocco continued to expand at the start of 2026, reflecting sustained demand for financing from businesses and households, alongside the growing role of participatory (Islamic) finance in the housing market.

According to the latest monetary statistics published by Bank Al-Maghrib, total outstanding bank credit reached approximately $126.6 billion at the end of January 2026, marking an annual increase of 8.4%. This represents an additional $9.8 billion in lending compared with the same period a year earlier, confirming continued momentum in banking activity.

Stronger momentum in non-financial sector lending

Credit to the non-financial sector accelerated during January, with annual growth rising to 5.3%, compared with 4.7% one month earlier. This improvement was mainly driven by increased lending to businesses.

Loans to private non-financial companies rose by 3.7% year-on-year, supported by higher demand for investment and real estate-related financing. Credit extended to public enterprises also recorded growth of 1.6%.

By contrast, household lending expanded at a slightly more moderate pace of 3.3%, reflecting a more cautious borrowing environment amid relatively high financing costs and ongoing pressure on purchasing power.

Equipment loans lead investment drive

By economic purpose, equipment loans stood out as the most dynamic segment. Outstanding equipment credit reached approximately $31.5 billion, posting annual growth of 25.9%. In absolute terms, this corresponds to an increase of nearly $6.5 billion over one year.

This strong expansion indicates continued investment in productive capacity, machinery and infrastructure by Moroccan companies, suggesting that corporate confidence remains relatively resilient despite external uncertainties.

Short-term treasury facilities, often used to cover working capital needs, continued to decline, though at a slower pace. Their contraction eased to 3.9%, compared with a sharper drop previously, pointing to some stabilization in short-term liquidity management.

Participatory finance boosts housing segment

The housing segment maintained positive growth, supported significantly by participatory financing solutions.

Total outstanding housing loans reached around $26.4 billion, of which approximately $3.1 billion came from participatory housing finance products, mainly structured as real estate Murabaha contracts, including pre-recorded margins.

Participatory housing financing increased by 19.6% year-on-year, rising from roughly $2.6 billion a year earlier to $3.1 billion at the end of January 2026. Out of the $773 million annual increase in housing loans, nearly $505 million was generated by participatory products alone, highlighting their growing contribution to residential property financing.

Conventional housing loans, meanwhile, recorded more modest growth and even showed slight monthly declines, underscoring the structural shift underway in favor of Sharia-compliant solutions within the real estate market.

Household credit trends: housing and consumption

Total loans granted to households amounted to approximately $40.8 billion, reflecting annual growth of 3.3%.

Within this category, housing loans increased by 3%, while consumer loans rose by 3.8%. Although still positive, the pace of expansion in consumer credit suggests a gradual moderation in demand linked to direct household spending.

These figures indicate that Moroccan households continue to rely on bank financing to purchase homes and fund consumption, but in a more measured manner compared with the stronger growth observed in investment-related credit.

Public and private sector breakdown

From an institutional perspective, credit to the public sector reached around $12.8 billion, rising by 15.3% year-on-year. This increase was partly driven by higher borrowing from local authorities and public entities.

Credit to the private sector totaled approximately $89.8 billion, up 4% compared with the previous year. This reflects steady financing flows to both companies and households, reinforcing the role of the banking system in supporting economic activity.

Rising non-performing loans signal caution

Despite the overall expansion in lending, financial pressure indicators remain present. Non-performing loans increased by 4.6% year-on-year, while their ratio remained stable at 8.3% of total outstanding credit.

The persistence of this relatively elevated ratio points to ongoing vulnerabilities among certain economic sectors and households, particularly in a context marked by fluctuating external conditions and domestic cost pressures.

A dual picture for monetary policy

The latest credit data present a mixed but coherent picture. On one hand, bank lending continues to grow at a solid pace, supported by strong equipment financing and the rapid expansion of participatory housing products. On the other hand, household borrowing is advancing more cautiously, and credit risk indicators underline the need for vigilance.

For policymakers, this environment requires a careful balance between sustaining financing for investment and growth and preserving financial stability. As Morocco moves further into 2026, the evolution of credit quality, interest rate conditions and household demand will remain key factors shaping the trajectory of the banking sector and the broader economy.