Poverty, Access to Credit and the Determinants of Participation in a New Micro-credit Program in Rural Areas of Morocco

Disclaimer The analysis and conclusions of this document are those of the authors. They do not necessarily reflect the official position of the AFD or its partner institutions. Foreword The " Impact Analyses " series aims to comprise works resulting from impact evaluations, and more largely, retrospective analyses of final results obtained in the framework of development policies or interventions. This study was carried out in the framework of a scientific partnership between the AFD, the Al Amana Association and the Abdul Latif Jameel-Poverty Action Lab. Contacts for follow-up on impact analyses: Tanguy Bernard ([email protected]) and Jocelyne Delarue 3 Poverty, Access to Credit and the Determinants of Participation in a New Micro-credit Program in Rural Areas of Morocco exPost exPost Introduction 5 Data and methodology 5 1. Descriptive analysis of wealth in rural Morocco 9 1.1 Wealth and demographics: the households of the poor and middle classes 9 1.2 Wealth and budget allocation: how the poor and middle classes spend their money 10 Food and festivity expenses 10 Education 11 Health 11 Other expenses 12 1.3 Wealth and infrastructure: to which basic services do the poor and the middle classes have access? 12 1.4 Wealth and economic activities: how the poor and middle classes earn their money 12 1.5 Wealth and Access to financial services 15 1.5.1 Use of credit by the poor and the middle class 15 1.5.2 Savings of the poor and the middle classes 18 2. Determinants of becoming a micro-credit client: a duration analysis 21 2.1 Al Amana and the surveyed villages 21 2.2 Explaining participation using a duration model 22 Household characteristics 24 Activity 24 Credit constraint, need of capital 24 Financial variables 25 Regional differences 25 Prediction of uptake for 2 years 25 3. Access to credit and the role of micro-credit 21