Overdrafts on the rise: accounts in the red!

The bank overdraft has become an increasingly common feature in households’ financial habits. Long viewed as a temporary cash-flow facility, it is now tending to become a quasi-permanent form of financing for a significant segment of banked clients, particularly those who are already indebted.

In fact, in 2024, the average debt ratio stands at around 55% for employees, compared with 62% for civil servants and 59% for retirees.

Once loan repayments have been deducted, many households are left with extremely limited leeway to cover everyday expenses: children’s schooling, food, transport, energy bills, healthcare, and even leisure activities, among others.

It must be said that, faced with the high cost of living—largely driven by exogenous factors—and not necessarily accompanied by an increase in purchasing power, many end the month in the red and turn to overdrafts as a breath of fresh air (or rather, a vicious cycle).

37.5% of households go into debt

Moreover, the latest survey by the HCP on households shows that the living standards of 75% of them have deteriorated over the past twelve months, and 45% expect a further decline in the coming year. This directly affects their ability to cover monthly expenses.

Indeed, 37.5% report going into debt or dipping into their savings to make ends meet. However, more than half still manage to cover expenses and maintain a decent standard of living through their income. In this context, only 2.5% are able to save part of their income. This is where bank overdrafts appear as an immediate, accessible, and flexible solution.

Their outstanding amount is steadily increasing, reaching 22.2 billion dirhams at the end of March, up 2% since the start of the year. Over the past five years, however, the trend has been uneven.

Outstanding overdraft balances peaked at nearly 26 billion dirhams in November 2022, in the wake of the health crisis and its economic consequences on household incomes.

The years 2020 and 2021 saw successive increases of 10%, reflecting the widespread use of this liquidity facility during a period marked by economic uncertainty, loss of income, and employment pressures. From late 2022 onwards, however, the outstanding amount began to decline.

The year ended with a 10% drop, followed by a 3.5% increase in 2023, a 4% decrease in 2024, and then another rise of 4.4% last year. This shows that bank overdrafts remain highly sensitive to economic conditions and the pressure on household budgets.

A 2.2% share of current accounts

Despite this, their share relative to total credit extended to individuals remains limited.

Out of a total of 386 billion dirhams, overdrafts represent only 5.7%. If adjusted to exclude overdraft accounts and non-performing loans, this share would rise to 7%.

By comparison, relative to current account balances, overdrafts account for just 2.2%—a small but steadily growing proportion, reflecting continued usage.

Another telling figure: the average overdraft stands at nearly 581 dirhams per account, with 38.2 million current accounts nationwide, according to Bank Al-Maghrib, compared to around 412 dirhams ten years ago.

One might assume that overdrafts are mainly used by low- or middle-income individuals. On the contrary, even high-income households may resort to them, particularly after repaying debts linked to mortgages and car loans.

However, they are most often used during periods requiring substantial spending, such as the start of the school year, religious holidays, or holidays. In any case, they are authorised based on salary, with a limit that can reach up to 80%.

Some banks even go up to 100% of the disposable income—that is, the portion of income remaining after loan repayments and other obligations.

It should be noted that, unlike traditional loans, bank overdrafts are heavily taxed. Depending on market offers, rates can range from 10% to 13.2% (excluding tax), which is the maximum conventional interest rate calculated and published by the central bank.

In addition to debit interest on this credit line, bank charges and fees are usually applied quarterly by most banks.

For example, an overdraft of 10,000 dirhams may incur charges of 330 dirhams over a quarter at a 12% rate. Naturally, exceptions exist for high-income clients who use this facility only occasionally.

In such cases, rates may fall below 8%, particularly if a large amount is requested. However, this condition usually requires guarantees, such as pledged land, a securities portfolio, or a savings plan.

In any case, overdrafts are so widely used that they are often included in account packages upon opening, leaving it up to the client whether to use them to make ends meet.

Cash loans: the secondary sector accounts for 47%

Across all categories, outstanding cash accounts reached 255 billion dirhams by the end of March 2026, up 2% since the beginning of the year—similar growth to equipment loans (314 billion dirhams) and non-performing loans (103 billion dirhams).

Meanwhile, outstanding real estate loans increased by 1% to reach 323 billion dirhams. By sector, the secondary sector captures the largest share of cash accounts, at 47% (119 billion dirhams).

It is followed by the tertiary sector with 116 billion dirhams and a 45% share. The primary sector accounts for just 8%, with 19.8 billion dirhams.