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The Effect of Non-Performing Loans on Credit Availability: Insight from the Moroccan Banking System

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  • Zakaria Savon

    (Faculty of Legal, Economic and Social Sciences- Souissi Mohamed V University of Rabat, Morocco)

Abstract

In recent years, Morocco has witnessed a notable and troubling increase in non-performing loans (NPLs). Data from Bank Al-Maghrib, the central bank of Morocco, reveals that nonperforming loans accounted for over 8% of the total credit volume in 2022.These loans present significant challenges, not only for the resilience of the banking sector but also because they can result in tighter credit conditions, making it increasingly difficult for businesses and consumers to obtain financing. This study conducts a comprehensive analysis of the impact of non-performing loans on credit supply within the Moroccan banking system, covering the period from the first quarter of 2009 to the fourth quarter of 2022. Findings from the ARDL model indicate that the rate of non-performing loans substantially impedes credit availability, both in the short term and the long term. This underscores the critical relationship between financial stability and economic stability.

Suggested Citation

  • Zakaria Savon, 2025. "The Effect of Non-Performing Loans on Credit Availability: Insight from the Moroccan Banking System," Post-Print hal-05060821, HAL.
    • Handle: RePEc:hal:journl:hal-05060821
    Note: View the original document on HAL open archive server: https://hal.science/hal-05060821v1
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    References listed on IDEAS

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