Unlocking capital markets for sustainable growth: Morocco’s strategic advancements

Over the past decade, Morocco has made significant progress in developing its capital markets, implementing reforms to enhance market efficiency and resilience, attract investment, and introduce financial instruments to unlock new financing channels for infrastructure and firms. Supported by initiatives such as the World Bank Group’s Joint Capital Market Program Sustainable Finance Facility (J-CAP SFF), funded by the Swiss State Secretariat for Economic Affairs (SECO), these efforts are transforming Morocco’s financial ecosystem into a more dynamic and inclusive platform to support economic growth. 

Morocco has positioned itself as a regional trade and financial hub for the African continent (Casablanca Finance City) and preferred location for global events. This represents a pivotal opportunity to accelerate capital market development, drive infrastructure and foreign investment, and stimulate tourism and job creation.

Despite progress, challenges remain in scaling up capital market to finance priority sectors as corporations still largely rely on bank financing, as is the case in many emerging economies. 

Transformative Financial Reforms: A Holistic Approach

To expand capital access and enhance market sophistication, Morocco has implemented structural reforms to modernize its financial system. The Casablanca Stock Exchange has developed an integrated market infrastructure, which is expanding with a central counterparty (CCP) and a derivatives market currently being finalized, improving efficiency and risk management. New financial instruments—including Real Estate Investment Trusts (REITs), Sukuks, green bonds, and project bonds—have broadened financing options for both public and private stakeholders. The introduction of a covered bond law is another significant step, designed to strengthen housing and municipal financing. Crowdfunding is emerging as a tool to support small-scale entrepreneurs, while synthetic securitization provides financial institutions with risk management solutions and enhanced liquidity.

JCAP SFF’s Role in Strengthening Capital Markets

JCAP SFF has played a key role in supporting Morocco’s capital market evolution by contributing to strengthen the regulatory framework and foster a more enabling investment environment. The following two recent transactions illustrate the tangible impact of supported reforms: 

1. Morocco’s first infrastructure-focused securitized debt fund, led by the National Office of Electricity and Drinking Water (ONEE), was enabled through the introduction of a new legal framework allowing local securitization funds to provide debt financing for infrastructure projects. By securitizing future cash flows, the initiative mobilized over $400 million, demonstrating the potential of debt securitization to channel private capital into energy infrastructure and to complement bank financing without relying on public guarantees.
2. The modernization of the private equity legal framework, aligning it with international best practices, through the recent amendment of the law on ‘Organismes de Placement Collectif en Capital’ (OPCC). This reform has already unlocked new Private equity and venture capital flows, with the International Finance Corporation (IFC) committing its first direct investment in a VC fund under Morocco legal framework.

Bridging the Gap: Addressing Market Demand Constraints

While Morocco now offers a comprehensive set of financial instruments, market implementation remains uneven. Some innovations, such as REITs and private equity funds (have gained traction, while others, including project bonds and debt funds, have seen a slower uptake. To fully harness capital markets for economic development, several critical challenges must be addressed.

1. Increase the number of investment-ready small and medium-sized enterprises (SMEs). Despite reforms, many SMEs struggle to access financing due to structural weaknesses, lack of financial transparency, and reluctance to accept equity investment. In Morocco, these challenges are compounded by an economic structure with relatively few firms of sufficient scale and growth potential to attract investment. Strengthening financial literacy, governance, and investment-readiness programs will be essential to increasing SME participation in capital markets and expanding access to non-bank financing.
2. Develop of a robust pipeline of bankable investment projects. Similarly, while Morocco has enacted comprehensive legislation to support public-private partnerships (PPPs), the development of a robust pipeline of bankable projects has been slow. As witnessed in other emerging economies, effective project preparation, improved coordination among stakeholders, and access to technical expertise will be critical to unlocking the full potential of PPPs. Establishing a project preparation fund to support feasibility studies and transaction structuring would help generate a steady flow of viable projects in key sectors such as transportation, energy, and sustainable infrastructure.
3. Diversify the investor base. While family offices and high-net-worth individuals are active, retail participation remains limited. Institutional investors face limited supply and low returns on traditional assets, even as Morocco requires long-term investments in infrastructure, housing, and for productive enterprises. Expanding issuances through a broader range of instruments is critical to better channel institutional savings into productive sectors, as is harmonizing investment regulations, strengthening financial expertise, and removing ad hoc approvals.
4. Set up a local credit rating agency. The absence of a local credit rating agency (CRA) further limits market transparency, while undermining price discovery and investor confidence. Establishing a domestic CRA or attracting an international one in Morocco would strengthen risk assessment, enhance market credibility, attract issuers and improve capital allocation.

Looking Ahead

To sustain momentum, the Moroccan authorities— are developing a comprehensive capital market development strategy to deepen financial markets and enable efficient allocation of funds towards productive firms and innovative capital-intensive infrastructure projects. This presents a pivotal opportunity to build on past achievements, foster collaboration among stakeholders, and unlock capital markets’ full potential to drive productive investment and sustainable growth. By strengthening regulatory frameworks and accelerating key reforms, Morocco is positioning its capital markets as a catalyst for long-term investment, private sector expansion, job creation and economic resilience. The WBG remains committed to supporting Morocco in this endeavor.