Case study: Al Amana of Morocco

Abstract

PurposeThe United Nations General Assembly adopted 2005 as the Year of Microcredit, recognizing the link between inclusive financial systems and the economic development of those most at need. Microcredit, or more broadly microfinance (MF) has a role to play in facilitating growth through the provision of credit to entrepreneurs. Association Al Amana for the Promotion of Micro‐Enterprises Morocco (Al Amana) is an unusually successful microfinance institution (MFI) registered as a non‐profit organization in Morocco. Starting in 1997, with capital provided by USAID, it has grown to become the leading MFI within Morocco and the broader Middle East and North Africa (MENA) region. It has seen rapid growth in clients and assets while also reaching a level of financial sustainability uncommon among MFIs. Why has Al Amana been so successful? This paper will seek to examine this question, highlighting key internal and external factors that have contributed to this organization's success.Design/methodology/approachFurther, this analysis will examine Al Amana within its regional enabling environment to highlight those critical issues within an entrepreneurial finance climate that are conducive to MF lending. Additional analysis of Al Amana includes a review of their portfolio, key financial indicators, and other bank strategies that have been instrumental in their financial growth and success. Lastly, the analysis will conclude with a discussion of the key factors that will become important to the sustainability and growth of this MFI as it serves the needs of entrepreneurs in Morocco. The methodology for the research consisted of a literature review of MFI activity in Morocco and the MENA region, an examination of key elements within the enabling environment, and a financial review of Al Amana and its key financial results.FindingsThe results of the research provide a case study of a successful MFI that is contributing to the development of entrepreneurs in its region. It will also highlight the specific organizational factors as well as key elements in the enabling environment that have facilitated the success of Al Amana.Originality/valueThe paper highlights the success of Al Amana in Morocco and presents some of the challenges facing the organization.