Amin Al-Diyouri, Director of Research and Communications at the “Anforisk” agency, confirmed that, in the context of the health crisis linked to the COVID-19 pandemic, micro-enterprises have been significantly affected in terms of payment terms.
During a virtual seminar on the topic “Payment Terms: The State of the Rescue Plan,” organized by the Swiss Chamber of Commerce in Morocco, Mr. Al-Duwairi noted that, when it comes to payment terms, small and medium-sized enterprises “do not suffer to the same extent as micro-enterprises.”
In this regard, he pointed out that “if we look at the situation of large companies, we see that it is completely contradictory: suppliers’ payment terms are longer than those of customers, and in this case, large companies experience longer delays in receiving their payments.”
The expert noted that inter-company lending stood at over 400 billion dirhams in 2019, exceeding the total amount of loans extended to privately owned, non-bank-financed companies for more than a decade, making it the primary source of financing for Moroccan companies. Addressing the crisis, Mr. Al-Diouri noted that at the start of the pandemic, companies faced greater difficulty in repaying their debts, and payment terms were extended from 40 to 49 days.
Mr. Al-Douri said that the resilience of the construction sector, which overcame the setbacks of 2020, was made possible thanks to government assistance, particularly through the “Revival Guarantee,” the “Oxygen Guarantee,” and other programs that helped meet the need for additional working capital.
For his part, Ahmed Belfahmi, head of a department at the Directorate of Public Works and Privatization, noted that public institutions and state-owned enterprises constitute the main component of the state in terms of public demand and investment.
In this regard, he noted that although the public institutions and contracting sector is a key driver of economic growth and the main implementer of major projects, it faces certain constraints, particularly regarding the expansion of the public portfolio, the concentration of performance metrics, shortfalls in transfers to the state, and the risk of excessive indebtedness, as well as dependence on the state budget and an inability to sustain economic models. He stated that “from this perspective, the Ministry of Economy, Finance, and Administrative Reform has taken concrete measures to manage the payment terms of public enterprises and contractors, while facing the challenge of maintaining the positive trend in these terms and assisting very small, small, and medium-sized enterprises in overcoming cash flow difficulties.”
He added that this also involves supporting public institutions and enterprises by expediting budget transfers from the general state budget and implementing procedures to exempt their loans from value-added tax, in addition to following up on various complaints submitted by suppliers via the AJAL platform.
For his part, Hicham Alaoui Bensaid, CEO of “Euler Hermes Akmar,” noted that, given the circumstances surrounding the pandemic, risks have automatically increased by a very significant margin, a trend reflected in Morocco particularly through the expected rise in losses for construction companies.
After highlighting the importance of loan insurance in risk management to address non-performing loans, Mr. Bensaid emphasized the need for a robust risk prevention system to provide a comprehensive and appropriate response to the current situation.
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