World Bank Approves $150 Million Loan to Support Entrepreneurship in Morocco

The World Bank’s Board of Executive Directors approved a total of USD150 million in funding on March 10 to support the Moroccan authorities’ plan to modernize the national identification system and and support innovative start-ups and job creation.

The two operations, aimed at strengthening social and economic inclusion, will improve social programs through a better personal identification system and, on the other hand, remove barriers which prevent start-ups and small businesses from accessing financing, says the World Bank.

Improving Social Programs

According to the World Bank, “almost 5.3 million Moroccans, of which two-thirds from rural areas, live under the threat of falling back into poverty due to their socio-economic conditions.”

With an envelope of USD 100 million, the Identity and Targeting for Social Protection Project is designed to help the most vulnerable by developing systems to ensure that social programs are better targeted and reach the most vulnerable Moroccans.

The development objective of this project is to expand coverage of a unique identifying number for the Moroccan population and foreign residents, and to improve targeting of social safety nets in the Project Area.

According to the World Bank, the project will “help double the impact of poverty reduction programs such as RAMED and Tayssir” and direct resources to only the most vulnerable households and individuals, resulting in estimated savings of more than USD 30 million per year. The project will be implemented by the Ministry of the Interior over a period of five years.

“The current program will benefit nearly 9.3 million Moroccans from the most disadvantaged segments of the population enabling them to have greater access to social protection programs. With a better designed and managed identification system, Morocco will be able to implement more targeted social programs that can have tangible impact on the population” said Diego Angel Urdinola, World Bank Senior economist and Task Team Leader for the new project.

Financing Startups and Innovative SMEs

The other project approved is a USD 50 million operation to improve financing opportunities for start-ups and innovative SMEs.

The Financing Innovative Startups and small and medium enterprises (SMEs) project is to facilitate the increase of private equity and quasi-equity finance for innovative startups and small and medium enterprises.

The project will support a financing program that will invest, along with private funders, in innovative start-ups and SMEs, as well as a selection of promising investments constituting “the highest contribution to net job creation in the Mena region,” according to the bank.

The project will also address gaps in the supply of investment expertise and support needed to create viable startups by providing resources to ecosystem support providers for mentoring and investment-readiness programs. Overall, the project will improve Morocco’s innovative private sector through the creation of a venture capital market in Morocco.

Fighting Social Exclusion

“Both operations support the government’s commitment to reduce social exclusion and promote private sector growth“ said Marie Françoise Marie-Nelly, World Bank Maghreb Country director, “improving targeting of social programs, strengthening social services and facilitating access to opportunities for entrepreneurs is the path to an inclusive growth that is beneficial to all Moroccans.”

Source :Morocco World News