Tariq Sijilmassi Chairman Credit Agricole

Tariq Sijilmassi is on an unusual mission. The Chairman of the Board at Credit Agricole Maroc regularly ventures into rural areas to identify projects in need of funding: olive oil factories, orange groves, fields of saffron and asparagus. Sijilmassi helps to structure banking products halfway between microcredit and standard business loans. Credit Agricole Maroc, with the country’s 3rd largest banking network, has thus found a new formula to turn profits—all the while raising thousands out of poverty.

“Distrust of bankers and financiers who live inside crystal balls designing sophisticated products is not entirely a bad thing. They don’t realize that there are people mired in poverty within a kilometer of their homes,” says Sijilmassi. In agribusiness, middlemen cash in most of the money for export goods like citrus fruits. The financial system needs to allocate resources to new economic drivers in the private sector that can help redistribute the wealth on a more rational basis.

The idea that government exists to regulate and redistribute a country’s wealth has never worked historically in Morocco. Low educational levels, especially outside major cities or in inner-city neighborhoods, have stood in the way of potential value creators that would share the burden of responsibility. Sijilmassi is in favor of a happy medium in which civil society works in tandem with government to drive the real economy. With his microcredit scheme, Sijilmassi went from 30,000 customers to 80,000. “My objective is that we reach 250,000 customers of microcredit clients in one year to 18 months,” he adds.

So far, the country’s banking system rests on healthy fundamentals. Risk management is good, as are the solvency ratios. But the dearth of companies, both large and small, acts as a brake on financial development. Growth in such a market is constrained by size. In the case of Credit Agricole Maroc, the key to development has been to recognize millions of potential customers, or about 45% of the workforce, in a radius of a few kilometers. They need investment in merchandising and packaging, as well as access to cheap seaport logistics. That is the way to add value to national production. According to Sijilmassi, it is also a way to get rid of the value-destroying middlemen.