Morocco Report Finds 38% of New Borrowers Spend More Than 40% of Income on Debt

Casablanca – Nearly four in 10 Moroccans who took out or renewed a loan in 2025 are spending more than 40% of their income on debt repayments, according to Morocco’s latest Financial Stability Report, pointing to growing pressure on household finances despite an improving economy.

The report, published by Bank Al-Maghrib, the Moroccan Capital Market Authority and the Insurance and Social Welfare Supervisory Authority, found that 38% of new borrowers had a debt service-to-income ratio above 40% in 2025, up sharply from 32% in 2024 and well above the 28% average recorded between 2015 and 2023. These borrowers also accounted for 45% of all outstanding loans, compared with 41% a year earlier.

The findings are based on the analysis of 639,013 loan files from people who contracted or renewed credit during 2025. Their average debt burden also increased, reaching 36% of income compared with 34% in 2024 and above the 31% average seen between 2015 and 2022.

Among borrowers whose debt payments exceed 40% of income, the report shows the pressure is shifting toward higher debt levels.

The share of borrowers spending between 50% and 60% of their income on repayments rose to 26% from 24%, while 23% were spending more than 70% of their income servicing debt. Functionnaires and private sector employees represented 68% of these heavily indebted borrowers.

Overall household debt climbed 6.9% in 2025 to MAD 456 billion, marking its strongest annual increase since 2012. Housing loans accounted for 60% of household borrowing and consumer credit for the remaining 40%. Household debt was equivalent to 27% of Morocco’s GDP, while the default rate remained high at 10.3%.

At the same time, Moroccan households continued to strengthen their financial assets. Total household financial wealth rose 7.5% to MAD 1.192 trillion, supported by MAD 935 billion in bank deposits and a 40.1% jump in investments in securities, which reached MAD 114 billion.

The report comes as Morocco’s economy grew 4.9% in 2025, with inflation remaining low at 0.8%. While the financial system continued to show resilience, the report said the rise in household indebtedness warrants close monitoring as borrowing continues to accelerate.