German bank DEG sues Moroccan banks

DEG, based in Cologne, has 13 regional offices as well as 4 branches, including one in Abidjan covering French-speaking countries, depending on the regional office in Nigeria.

German Bank DEG, a subsidiary of the KFW Group, is negotiating with the 3 largest Moroccan banks to support and finance partnerships in Morocco and Sub-Saharan Africa. The goal is to support companies in the country of their presence according to the logic of integration with the local financial system. DEG representatives were in Casablanca on April 29 to meet with banks as well as companies. In Africa, its commitments are currently 2.04 billion euros, of which 287 million are in North Africa.

German bank DEG, KFW’s private sector development arm, wants to strengthen its links in Morocco. It is mobilizing aggressively this year to establish partnerships, particularly with the Moroccan financial sector, for the benefit of companies. According to an informed source, discussions are underway with major Moroccan banking groups (the top three places) to support and finance partnerships in Morocco and sub-Saharan Africa. Moroccan government representatives were in Casablanca on April 29th to meet with leaders of Moroccan private banks as well as business leaders to discuss possibilities for financial support. Created in 1962, DEG has an active portfolio of more than 8.4 billion euros, spread over more than 90 developing and emerging countries, including Morocco. In Africa, its commitments are currently €2.04 billion, to more than 150 financial institutions and corporate beneficiaries, including €287 million in North Africa. However, DEG is more present on the continent in South Africa (627 million euros in commitments), West Africa (547 million) and East Africa (479 million) than in the Maghreb. Thus, the German bank aims to strengthen its presence in North Africa, particularly in Morocco where it already has large corporate clients. These include TGCC (Construction). Overall, DEG mobilizes an average of €1.9 billion in commitments annually, in all the countries in which it is located. In the eyes of the German financial institution, SMEs in developing countries generally do not have access to credit. The objective of its involvement in the Moroccan financial sector is to reach these companies in the local market.

“We remain complementary to the domestic financial system without distorting the financial market,” DEG said. In addition to refinancing, partner banks benefit from a consulting program to sustainably develop SME operations. The ongoing negotiations with Moroccan banks fall into this framework, both in Morocco and in the countries of presence in Africa. In addition to banks, discussions are also underway with “key” players in different activities: agro-industry, construction, charcuterie … DEG already has a diversified portfolio in Morocco, including San Jose Lopez (SJL) Maghreb SA, a major player in the logistics sector And maritime transport between the Maghreb and Gibraltar and the Moroccan Distillation and Pumping Company (CMGP). DEG, along with other actors, participated in the expansion of the activities of this last Moroccan group specialized in the installation and distribution of irrigation equipment. And that’s not all. Among its clients, there is also Dolidol (Mattresses) for which it has been involved in financing the group’s expansion plan.

DEG offers long-term (+5 years) financing possibilities in the form of loans and minority stakes. Its interventions can be accompanied by a broad program of technical assistance. The Bank’s various financial support programs specifically support liquidity management and the introduction of environmental and social management systems. Funding from DEG generates significant mobilization of additional funds for its partners. Thus in 2019, that is, before the crisis, approved investments of 2 billion euros made it possible to mobilize more than 11 billion euros.

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