German bank DEG courts Moroccan banks

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

The German bank DEG, a subsidiary of the KFW group, is negotiating with the Top3 Moroccan banks for support and financing partnerships in Morocco and sub-Saharan Africa. The objective is to support companies in their country of presence, according to a logic of complementarity with the local financial system. Representatives of the DEG were in Casablanca on April 29 to get to know banks but also companies. In Africa, its commitments currently stand at 2.04 billion euros, including 287 million in North Africa.

The German bank DEG, the arm of the KFW group for the development of the private sector, wants to strengthen its links in Morocco. It is strongly mobilizing this year to forge partnerships, particularly with the Moroccan financial sector, in favor of businesses. According to a source familiar with the matter, discussions are underway with major Moroccan banking groups (the Top 3) for support and financing partnerships in Morocco and sub-Saharan Africa. Representatives of the DGE were in Casablanca on April 29 to meet leaders of Moroccan private banks but also business leaders to discuss the possibilities of financial support. The DEG, created in 1962, holds 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 currently stand at 2.04 billion euros, in favor of more than 150 financial institutions and beneficiary companies, including 287 million euros in North Africa. On the continent, however, DEG is more present in South Africa (627 million euros in commitments), West Africa (547 million) and East Africa (479 million) than in the Maghreb. . The German bank thus aims to strengthen its presence in North Africa, particularly in Morocco where it already has major corporate clients. These include TGCC (Construction). Overall, the DEG mobilizes an average of 1.9 billion euros in commitments per year, in all its countries of presence. 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 on the local market.

“We remain complementary to the local financial system without distorting the financial market”, estimates the DEG. In addition to refinancing, partner banks benefit from an advisory program to sustainably develop their SME operations. Current negotiations with Moroccan banks are part of this framework, whether in Morocco or in their countries of presence in Africa. In addition to the banks, discussions are also underway with “major” players in various activities: agro-industry, construction, charcuterie… DEG already has a portfolio distributed in Morocco, including San Jose Lopez (SJL) Maghreb SA, a major player in the logistics and maritime transport sector between the Maghreb and Gibraltar, and the Moroccan Drop-to-Drop and Pumping Company (CMGP). The DEG, alongside 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 participated in the financing of the group’s expansion plan.

The DEG offers long-term financing possibilities (+5 years) in the form of loans and the acquisition of minority stakes. A vast program of technical assistance can accompany its interventions. The bank’s various financial support programs have notably supported liquidity management and the introduction of environmental and social management systems. DEG funding generates a considerable mobilization of additional funds for its partners. Thus in 2019, i.e. before the crisis, the 2 billion euros of approved investments made it possible to mobilize more than 11 billion euros.

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