Algerian mobility startup Yassir’s signpost on 10 Avenue, Casablanca, Morocco reads that it is a meal delivery company, but that will be changing soon. Fresh off a new $150M Series B funding round, Yassir Maroc, its Moroccan subsidiary, will be making a major detour. A new payment institution license with Morocco’s central bank, Bank Al-Maghrib (BAM), is in the offing. Once the fintech license, lodged with BAM since January this year, is approved, the startup will attempt to diversify and solidify its position within Morocco.
Introduced by Morocco’s 2014 banking law, payment institutions are a new category of operators. Holding this license allows a company to execute money transfer transactions, facilitate cash deposits and withdrawals, enable remote payment transactions, execute recurring or one-time direct debits from payment accounts, process card payment transactions, and execute fund transfers from payment accounts. A recent report by Bank Al-Maghrib reveals the magnetic pull drawing Yassir Maroc towards its proposed Moroccan adventure. As of 2023, nearly 84% of transactions were carried out by wallets issued by payment institutions in Morocco, compared to 16% by wallets linked to bank accounts. In terms of value, 70% of transactions made through wallets were recorded by payment institutions, compared to 30% by banks, the report adds.
But Yassir is not an isolated case. The past month has seen even more international interest in the North African country. Egypt’s Money Fellows has joined the scene. Buoyed by a recent $31 million funding round led by Germany’s CommerzVentures, Dubai’s Middle East Venture Partners (MEVP), and Kuwait’s Arzan Venture Capital, the community savings platform is in the final stages of liaising with Moroccan banking and financial authorities for authorization to launch Money Fellows in the Kingdom.
Just like Yassir Maroc, Money Fellows’ interest in the Moroccan fintech market is mostly inspired by the prevailing financial behavior of Moroccan consumers. Many Moroccans use Rotating Savings and Credit Associations (ROSCAs) for informal savings, Money Fellows’ primary product offering. This use represents an annual flow estimated at 40 billion DH (USD 4 billion), equivalent to 28% of the savings collected by banks in the country. According to Bank Al-Maghrib (BAM), 26% of Moroccans opt for financing solutions, with 88% relying on informal services, particularly the Daret (Darte) or Moroccan tontine. In Egypt, where Money Fellows’ product has already been deployed, there are about 4.7 million users, with up to 7% contributing monthly via the platform.
Also recently joining the fintech ecosystem in Morocco is the Saudi Arabia-based EdFaPay, which already maintains a presence in Pakistan, Latin American markets, and Tunisia. The company, already armed with a new license, plans to offer its financial solutions, including soft Point-of-Sales (POS) services as well as payment gateway, to merchants and other professional clients across the Kingdom.
Experts see the arrival of these new players in the Moroccan market as confirmation that the financial sector, which was initially reserved for banks and large companies, is increasingly being disrupted by innovative startups. But a few doubts still linger.
“Moroccans remain wary of online payments and fintech-related services, which slows the adoption of fintech solutions. Consumer trust is crucial for the success of any technological innovation in the financial sector,” says Nabil El Mahyaoui, a Moroccan ecosystem expert. “Again, despite the growth of the service sector, Morocco remains heavily dependent on cash transactions. This dependence limits the adoption of fintech solutions, as digital payments are not yet widely accepted by the population.”
These concerns were echoed by a Moroccan fintech expert who noted that “to digitize the Daret model in Morocco,” for example, “it is essential [for Money Fellows] to consider constraints, such as Moroccans’ reluctance to make online payments, and prevent payment defaults.”
“Alternatives, such as establishing physical agents, could verify the status of individuals wishing to join the digital Daret and carefully analyze their solvency,” he adds.
The Rise of Fintechs in Morocco: Breaking the Banking Monopoly
In Morocco, the reins of fintech governance are held primarily by two entities: Bank Al-Maghrib (BAM), the central bank, and the Moroccan Capital Market Authority (AMMC). However, it’s not a two-horse race. Other institutions, such as the National Telecommunications Regulatory Agency (ANRT), Insurance and Social Welfare Supervisory Authority (ACAPS), Deposit and Management Fund (CDG), and the Central Guarantee Fund (CCG), play supporting roles in this financial ecosystem.
BAM, wearing multiple hats, oversees a wide range of banking activities, from digital payments and mobile banking to insurance and loans. It’s not just a regulator; it’s a cheerleader for fintech adoption, actively encouraging the country’s robust financial system to embrace digital transformation.
A pivotal moment in Morocco’s fintech journey came in 2009 with the introduction of Law 103–12, also known as the “new banking law.” This law, which notably introduced participatory banking, also recognized electronic money and paved the way for the emergence of payment institutions and payment agents — crucial players in the fintech landscape.
Before 2014, the world of digital payments in Morocco was an exclusive club, with traditional banks and credit institutions holding the keys. To access digital payment services, you needed a bank account. But the winds of change were blowing.
In 2014, the new banking law opened the doors to a new era by introducing “payment institutions.” These entities, subject to regulatory approval and licensing, could now offer digital payment services, broadening financial inclusion by allowing even unbanked users to deposit cash at participating branches.
This landmark change, which effectively broke the banks’ monopoly on payment services, became official in June 2016 when Bank Al-Maghrib issued two circulars outlining the rules and mechanisms for payment institutions and services. It was a turning point, marking a new chapter in Morocco’s fintech story.
