Bottom of the Pyramid Strategies as a Development Tool: Case of Morocco Microfinance

Abstract

Microfinance emerges as a special tool for Bottom of the Pyramid (BoP) strategies developed by Prahalad (2005). It has an interesting history in Morocco since 1993 with a non-profit organization granting small loans to rural women (Diani, 2019). The initiative has aroused the interest of public authorities and international institutions, allowing a considerable growth of microfinance (Duval, 2001). Using a systematic review of empirical articles, this paper aims to explore how BoP strategies function as a development tool in Moroccan microfinance. We’ll consider financial outcomes as income, saving, expenditure, accumulation of assets, and expanding current activities; as well as non-financial outcomes including health, food security and nutrition, education, child labor, and women’s empowerment. We’ll examine the regulatory environment, key players, and trends in the sector, assessing the impact of microcredit on low-income populations. We’ll also identify challenges and opportunities to enhance financial inclusion and economic development in Morocco. The mixed outcomes of microcredit impact on poor populations all over the world pushed us to investigate the case of Morocco, answering the question: Does microcredit combine social development with profitability? We find positive impacts for borrowers, even if, in some cases, talk about non-significant outcomes whose causes must be sought elsewhere, such as the transformative effect (Banerjee et al., 2015) or loan delinquency (Chong, 2021).

Keywords: BoP strategies, microcredit, impact, Morocco.

JEL Classification: G21, O15, O16, O19

Paper type: Theoretical Research