The Kingdom of Morocco lies at the northwestern corner of the African continent, and is the most westerly of the North African countries known in Arabic as the Maghreb. Situated geo-strategically with both Mediterranean and Atlantic coastlines, the country remained independent for centuries while developing a rich culture blended from Arab, Berber, European and African influences.

Microfinance is a very new phenomenon in Morocco. The oldest credit delivery programmes were initiated in 1993 and the international experience on how to do microcredit effectively was not introduced within the country until 1995-1996. In 1997, the Morocco office of the UN Development Programme (UNDP) identified microfinance as an effective tool in eradicating poverty given that the country had a genuine start-up setting, with penetrable urban markets, and a culture that supported group solidarity and excellent group repayment rates. Consequently, UNDP, in close collaboration with UNCDF, launched the MicroStart Morocco programme in 1998 with the main objective of building the capacity of local organizations to assist them in scaling-up outreach, while achieving managerial and financial sustainability.

To date, the MicroStart Morocco programme has worked to enhance the access of low-income microentrepreneurs, particularly women, to financial services in order to expand their business, increase their income, and augment employment. Preference was given to provinces targeted by UNDP Morocco. MicroStart achieved its aim through (1) building the capacity of local organizations to provide microfinance services to economically active poor clients on an operationally sustainable basis; (2) building the capacity of a local technical service provider to provide ongoing technical assistance and developing the structures to support these local organizations over the long term; and (3) contributing to local and global knowledge of the impact of microfinance on clients and how to build the capacity of young organizations.

Much research and attention has been given to MicroStart Morocco due to its unique position as UNDP’s first pilot programme to become operational. Save the Children Federation (SC), the International Technical Service Provider (ITSP) for the project, has actively supported and strengthened the capacity of DIS, the Local Technical Service Provider, to ensure that both the short term and long term microfinance technical needs in the country were being met. Over the three-year period, there have been substantial improvements in outreach, and portfolio performance of the five participating institutions, with an increase in client numbers from 3,300 to 50,529 and a dramatic increase in outreach to women from 61% to 97% and growth of quality portfolios, with percent at risk below 1%. Moreover, Zakoura, one of the partner organizations has been identified as a promising ‘breakthrough’ institution that will serve Morocco’s largely unsatisfied market in a sustainable manner for years to come. The second phase of the programme that started in 2001 will continue to focus on scaling up outreach, with a focus on women, and investing selectively in a few organizations that have transparent track records and show potential for breakthrough.