Moroccans Cash Transactions Caused Huge Inefficiency
The use of cash among Moroccans reached a high record last year due to the consequences of the coronavirus crisis and the ensuing quarantine. This drives families and businesses to withdraw more money from banks than usual
The use of cash among Moroccans reached a high record last year due to the consequences of the coronavirus crisis and the ensuing quarantine. This drives families and businesses to withdraw more money from banks than usual.
According to the latest data from Bank Al-Maghrib, the value of cash in circulation at the end of 2020 was approximately 300 billion and 626 million Dirhams, an increase of 50 billion Dirhams from the end of 2019.
This amount of cash in circulation among Moroccans represents an increase of about 20.1 percent compared to the end of 2019. a massive and unique increase due to the impact of the Corona crisis on the Moroccan economy.
This unusual withdrawal bank funds in 2020 reflects the panic and fear caused by the imposed quarantine and the need for cash, both by individuals and companies. Keeping some cash money is seen as a precautionary measure to face the crisis.
Normally, Moroccans withdraw a lot of cash money from the banks during religious events or during the summer holidays, which the government considers wrong as it increases the lack of liquidity in financial institutions and is also a testament to people’ preference for cash instead of using bank cards and other payment solutions.
Therefore, the Moroccan Central Bank will be forced to fund the necessary money into the accounts of banks whenever a similar crisis occurs. This situation leads Abdellatif Jouahiri, the president of Bank Al Maghrib, to urge the frequent use of alternative solutions, such as phone payment services
The large volume of cash in circulation is negatively affecting the banking system’s ability to provide credits, and thus the financing new projects, especially in the face of this time of crisis that coincided with the adoption of a national plan to motivate small enterprises with soft loans.
It is noted that a large number of Moroccans still prefer to deal in “cash” although the authorities have taken measures to limit this through the development of online processes and the launching of mobile payment services which are still not common among Moroccans.
The financial authorities warn against the widespread use of cash as it leads to economic and social inefficiency and entails high costs for companies. This phenomenon also undermines equal opportunities for financial services, reducing the number of electronically financial transactions .