EBRD backs Moroccan youth entrepreneurs with €10 million loan

The European Bank for Reconstruction and Development approved a €10 million loan to Fondation Arrawaj, one of Morocco’s leading microlenders, to support young entrepreneurs under 35 years old through its Youth in Business programme, according to a EBRD press-release. The financing will help the foundation on-lend to private micro, small, and medium-sized enterprises owned or led by young people, with special focus on regions affected by Morocco’s 2023 earthquake. Young entrepreneur-led businesses present unique market opportunities for Morocco’s financial sector but continue facing financing gaps that limit their economic potential.

Only 14% of young Moroccans have bank accounts, highlighting the significant financial inclusion challenges facing the country’s youth. The loan package includes comprehensive technical cooperation to build Fondation Arrawaj’s capacity for serving eligible small businesses, plus results-based payments funded by EBRD. Training opportunities will also be provided for the foundation’s sub-borrowers, focusing on digital and non-financial services to help young entrepreneurs grow their operations.

The facility benefits from first-loss risk cover for sub-loans in earthquake-affected regions, helping encourage lending in areas still recovering from the disaster. Founded in 1996 as FONDEP, Fondation Arrawaj ranks as Morocco’s third-largest microfinancing institution with nearly €200 million in total assets and 19% market share. The organization employs 1,942 staff across headquarters and 256 branches in 15 regions nationwide, serving close to 120,000 clients.

Morocco joined EBRD as a founding member, with the bank investing over €5.8 billion through 123 projects since 2012. EBRD’s country focus includes sustainable energy, private enterprise financing, infrastructure reform, and non-sovereign financing. The new loan supports the bank’s broader strategy of promoting youth entrepreneurship while addressing recovery needs in earthquake-affected communities across Morocco.