Rabat – Al Karama is a non-benefit association founded in 1999 which specializes in microcredit. Made under Morocco’s national microcredit law (18/97), it is focused on supporting the dynamic development of microenterprise by providing budgetary and specialized help to its customers. The association is supported by interns from the US and the UK.
As of March 2012, Al Karama’s Gross Loan Portfolio was MAD 35,4 million (USD 4.2 million) and it served 16,200 customers through 46 branches and satellite workplaces in three areas of Morocco. Al Karama is centered around a need-based clientele, loaning mainly to women (62% of customers) and social advancement projects. Al Karama’s presence in provincial regions is critical (30% of the portfolio).
Al Karama headquarters are located in Rabat Morocco. The initial goal of this program is to provide small manageable loans to help kickstart businesses from small as fruit stands to as large as a bakery. The type of clients they aid are people with no credit or people who are illiterate, and therefore do not have access to the traditional banking system. This makes it extremely hard for people in this situation to gain any start-up capital with a traditional loan.
The process of being approved for a loan
The process begins, with the help of Al Karma agents, by presenting the business plan and declaring any collateral the entrepreneurs have, if any. The agents then go out into the communities and meet with the clients’ peers to carry out a proper analysis of the client’s ability to pay off the loan and measure the shape of their current business, if relevant. Once this process has been completed, the agents are then able to create a profile of the client’s ability to pay off a loan with interest and they are either approved or denied the loan.
These microloans are an asset to the locals trying to build a business who would otherwise be turned down if they went to a traditional bank. To compensate the amount of trust needed to provide these loans, the interest rates are higher than a traditional loan given in a bank.
The most common businesses that the firm works with are bakeries who usually need early capital to fund the ingredients required to make their products, as well as utensils, and appliances to boost production.
The interns provided through the Moroccan Center for Arabic Studies come from the U.S. and other countries like the U.K. and are able to work alongside this program. They help guide their clients through the process of running a business as well as acquiring funds.
Interns Christopher.L and Alex.B who worked in the Marketing group explained to Morocco World News their experience while working with Al Karma, stating: “There is a lot this overall experience has taught and we are glad to able to support the main goal of Al Karma which is to expand services to the neglected Eastern region of the country and provide financial literacy to multiple residents.”
In 2010, Al Karama was rated ” β ” by MicroRate. The rating scale is set from A to D and utilizes a Plus or minus system. The highest rating being, α making Al Karma’s rating extremely competitive.
Grameen-Jameel, the Middle Eastern and North African social business, has been supporting Al Karama since 2005. The work was started with Morocco’s first meeting for microfinance associations and strategy producers to talk about the significance of growing administrations to the disregarded Eastern district of the nation. Al Karama has become a partner to Grameen-Jameel in 2006. Grameen-Jameel has given financing and specialized to support Al Karama.