The European Bank for Reconstruction and Development (EBRD), in collaboration with the European Union (EU), has extended a EUR 20 million loan to Al Amana Microfinance, Morocco’s leading microlender, to support youth entrepreneurship and support recovery efforts in areas impacted by the 2023 earthquake, according to a statement from EBRD on Friday.
Issued in local currency, the funding is part of the EBRD’s Youth in Business Program. The funding would provide much-needed financial support to micro, small, and medium-sized enterprises (MSMEs) owned or led by entrepreneurs under 35.
Young business leaders in Morocco face significant challenges in securing financing, with only 14% of young Moroccans holding a bank account. This loan would bridge those gaps while focusing on regions still recovering from the devastating earthquake, the statement explains.
The initiative includes more than just financial aid. A comprehensive technical cooperation package will enhance Al Amana’s capacity to serve MSMEs. The package, funded by the EBRD’s Southern and Eastern Mediterranean Multi-Donor Account, offers training programs to improve financial management and provide digital and non-financial services to borrowers.
The EBRD’s Small Business Impact Fund will also fund training for Al Amana’s sub-borrowers. In addition, the program includes first-loss risk cover for loans targeting earthquake-affected areas.
The EU supports the initiative through its European Fund for Sustainable Development Plus (EFSD+). Launched in 2021, EFSD+ mobilizes additional financial resources for sustainable development via grants and financial guarantees. With a global guarantee capacity of EUR 39.8 billion.