EBRD grants €10M loan to boost youth entrepreneurship in Morocco

Friday 19 September 2025 - 07:50

By: Dakir Madiha

EBRD grants €10M loan to boost youth entrepreneurship in Morocco

The European Bank for Reconstruction and Development (EBRD) has approved a €10 million loan to Fondation Arrawaj, one of Morocco’s leading microfinance institutions. The financing aims to empower young entrepreneurs and small businesses, particularly in regions affected by the Al Haouz 2023 earthquake, to address persistent challenges in accessing capital.

Empowering youth-led businesses

This loan is part of the EBRD’s Youth in Business programme, which targets micro, small, and medium-sized enterprises (MSMEs) led by entrepreneurs under the age of 35. Despite their potential, youth-led businesses in Morocco frequently struggle with limited access to formal financing. Only 14% of young Moroccans have a bank account, highlighting significant gaps in financial inclusion.

The programme seeks to bridge these gaps by providing tailored financial solutions, allowing youth-led enterprises to grow and contribute to Morocco’s economic development.

Risk coverage and technical support

The loan will be accompanied by a technical cooperation package to enhance Fondation Arrawaj’s ability to meet the needs of young businesses. This support includes staff training, digital tools, non-financial assistance for entrepreneurs, and results-based incentives funded by the EBRD.

To encourage lending in earthquake-affected areas, the loan also features a first-loss risk cover on sub-loans. This mechanism minimizes risk for the microlender while increasing financing opportunities for businesses in vulnerable regions.

Fondation Arrawaj’s role in microfinance

Established in 1996 as FONDEP, Fondation Arrawaj is Morocco’s third-largest microfinance institution. By March 2025, it managed nearly €200 million in assets, held a 19% share of the microfinance market, and served approximately 120,000 clients through 256 branches across 15 regions. The institution employs nearly 2,000 people, playing a crucial role in supporting underserved communities.

Morocco’s partnership with the EBRD

Since joining the EBRD in 2012, Morocco has received over €5.8 billion in investments across 123 projects. The Bank’s focus on sustainable energy, private enterprise financing, and infrastructure reform aligns closely with Morocco’s economic priorities.

The partnership with Fondation Arrawaj reinforces these goals by strengthening financial accessibility for young entrepreneurs, a vital component of the country’s long-term development and resilience strategy.