The Central Bank of Morocco acknowledges that Morocco is ranked among the first countries in the world in which cash dealing prevails (Al Jazeera)

Rabat

- Moroccan Mohammed M. works in selling household utensils in one of the popular markets on the outskirts of Rabat. Every morning, he takes his cart loaded with utensils and goes to the market. He arranges them on the ground in front of one of the shops and continues working without stopping until the evening.

Muhammad deals with his suppliers and customers in cash, as this is the method of trade that he knows and trusts. He adds, “I do not know any other way to buy and sell other than cash. As for my savings, I keep them at home.” When we asked him about dealing with a bank card or depositing his savings in a bank, he lowered his face and said. Smiling, “How do I know if someone would steal the bank with all my savings?”

As for “Abdul Rahim S,” an employee in the private sector who has a bank account to which his monthly wages of approximately 7,000 dirhams ($700) are transferred, he explained to Al Jazeera Net that he withdraws the entire amount to pay in cash the rent expenses, his children’s school costs, and water, electricity, and Internet bills. And other expenses.

Abdul Rahim prefers to pay bills in cash and keep paper receipts, and when we asked him why he preferred paying in cash instead of paying directly from his bank account electronically, he thought a little before answering: “Maybe it is a matter of habit and lack of trust in electronic applications.”

Morocco is ranked among the first countries in the world where cash dealing is widespread (Reuters)

Noticeable acceleration

Mohamed and Abdel Rahim are among the millions of Moroccans who prefer to deal with cash rather than electronic payment.

Banknotes in circulation, “cash,” are known to continue to rise in Morocco, as the monthly bulletin of the Bank of Morocco on the economic and financial situation, published last February, showed an increase in banknotes in circulation in December by 10.9%.

Currency in circulation has witnessed a noticeable acceleration in recent months, reaching 393.5 billion dirhams ($39 billion) in December, compared to 354.8 billion dirhams ($35 billion) in November, and 344.5 billion dirhams ($34.2 billion) in October and 342.9 ($34 billion) in September.

The Governor of the Bank of Morocco (Central Bank Governor) had previously stated that Morocco is ranked among the first countries in the world in which cash dealing is widespread.

According to the British research platform "Merchant Machine", Morocco tops the twenty countries most dependent on monetary performance in 2022.

Economist Rachid Sari noted an increase in the use of “cash” since the end of the Corona pandemic, as it moved from 342 billion dirhams ($34 billion) in 2021 to 386 billion ($38 billion) in 2022, then 393 billion dirhams ($39 billion) at the end of the year. 2023.

In his view, this is due to the limited demand for electronic transactions due to the lack of trust in financial and banking institutions, and also the lack of openness to digital technologies, especially among the older generations, due to the complexities of digital performance and the difficulty of dealing with this means. In addition to this, the imposition of commissions on the digital performance of invoices, which makes... The citizen prefers to perform in cash.

As for the economic and financial expert, Tayeb Aissa, he attributes the increase in cash circulation in Morocco to several factors, including the fact that a large percentage of Moroccans are outside the banking system and do not have bank accounts, and even those who do have bank accounts, many of them prefer to pay in cash.

According to Central Bank data for the end of 2022, 17.3 million Moroccans have at least one bank account, 16.5 million of whom have personal accounts.

In an interview with Al Jazeera Net, Aais pointed to a number of sectors and areas in which cash is widely used, the first of which is the agricultural sector, as most of the Bedouin population - who represent 40% of the population - deal with cash due to the lack of banking agencies in their villages, and also because their savings are limited and they prefer not to... Put them in banks.

The other sector is the informal sector, which represents about 30% of economic activity, and transactions are carried out in cash.

What are the repercussions?

Sari believes that imposing some new tax measures (such as imposing a fine on anyone who exceeds 30,000 dirhams in cash with the same customer) and the development of the digital field did not contribute to reducing money dealing.

He believes that the increase in cash circulation has repercussions on the economy, as it would lead to an increase in interest rates, especially in the current economic conditions characterized by a high rate of inflation, adding that the rise in cash forces the central bank to intervene to provide liquidity to banks to achieve self-sufficiency within the financial market.

The Central Bank had pumped 93 billion dirhams (about 9 billion dollars) on average daily during the year 2022, compared to 83 billion dirhams (about 8 billion dollars) in 2021.

He attributed this increase to tensions over liquidity, which generally increased during the year 2022, mainly in line with the increase in cash circulation.

For his part, Aais believes that the increase in cash circulation means that huge sums of money are moving around the country without benefiting from the state treasury, as taxes are not extracted from them, and therefore they are not invested in improving services directed to citizens. On the other hand, he believes that the unstructured sector that deals in cash is Without leaving a clear trace, it practices unfair competition with those who declare their transactions legally and pay taxes on them.

The greatest danger is that expressed by the Governor of the Central Bank and is related to fears of exploiting this phenomenon in illicit paths such as financing terrorism and money laundering.

Most Moroccan rural residents deal with cash due to the lack of banking agencies in their villages (Reuters)

Efforts without results

The government's efforts and announced campaigns did not succeed in encouraging electronic financial transactions, as paper money remained the most popular method of payment for Moroccans.

The Central Bank launched media campaigns to raise awareness and improve performance via the mobile phone called the “electronic wallet” and the “MarocPay” brand, by disseminating information in an educational and simplified manner about this method of performance.

The number of electronic wallets “M-wallets” opened within the framework of the mobile payment system in Morocco increased from 6.3 million wallets in 2021, to 7.7 million wallets in 2022.

On the other hand, the Cash Center worked to expand the electronic performance system by providing more than 55,000 payment devices in major commercial markets, fast food stores, gas stations, and at merchants.

For their part, banks have moved towards digitization to meet the needs of their customers for fast and secure services via mobile applications and provide secure payment options online.

All these efforts did not succeed in increasing electronic financial transactions, as paper money remained the most popular method of payment for Moroccans.

Therefore, Sari stresses the necessity of lifting the injunctive penalties on commercial transactions with cash, working to facilitate and simplify electronic transactions more, and working to change the culture to make digital dealing a part of daily financial transactions. He also calls for banning commissions on electronic performance and generalizing digital platforms to become accessible to everyone. .

As for Aais, he demands opening the digitization market without monopolizing it from any party and launching competition in the field of mobile performance services to encourage electronic performance and restrict the use of cash.

Source: Al Jazeera