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Rating Versus Real Collateral Trade-Off for Bank Loans to Moroccan SMEs in a Context of Deteriorating Balance Sheet Fundamentals

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  • Rachid Maghniwi

    (Université Mohammed 5 RABAT)

Abstract

This study analyzes the determinants of the trade-off between rating-based assessment and the requirement for real collateral in bank lending to Moroccan SMEs, particularly in a context of deteriorating balance sheet fundamentals. Facing post-pandemic economic challenges and rising non-performing loans, Moroccan banking institutions are confronted with a major dilemma: strengthen their dependence on internal rating systems or favor tangible guarantees. Our research, based on a sample of 237 SMEs and covering the period 2019-2024, demonstrates that the deterioration of SMEs' financial indicators leads to a significant shift in the balance in favor of real guarantees, to the detriment of the rating approach. This evolution, while securing the banking system in the short term, risks exacerbating inequalities in access to financing and hindering the recovery of the Moroccan entrepreneurial fabric. Practical recommendations and policy perspectives are proposed to rebalance this trade-off.

Suggested Citation

  • Rachid Maghniwi, 2025. "Rating Versus Real Collateral Trade-Off for Bank Loans to Moroccan SMEs in a Context of Deteriorating Balance Sheet Fundamentals," Post-Print hal-05096207, HAL.
    • Handle: RePEc:hal:journl:hal-05096207
    DOI: 10.47191/ijmei/v11i5.08
    Note: View the original document on HAL open archive server: https://hal.science/hal-05096207v1
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    References listed on IDEAS

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