According to the latest annual financial stability report jointly published by Bank Al-Maghrib, the Insurance and Social Welfare Supervisory Authority, and the Moroccan Capital Market Authority, the proportion of borrowers allocating more than 40% of their income to debt servicing rose from 32% in 2024 to 38% in 2025.
The figures have fueled concerns that, for some households, borrowing is no longer being used primarily to finance major investments, but rather to cover everyday expenses.
The report also found that the average debt-to-income ratio among individuals who either took out new loans or renewed existing ones increased from 34% in 2024 to 36% in 2025.
Meanwhile, borrowers whose debt obligations exceed 40% of their income now account for 38% of all borrowers and hold 45% of the total outstanding loan portfolio, up from 41% a year earlier.
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Commenting on these figures, Youssef Kraoui Filali, president of the Moroccan Center for Governance and Management, said that when a household allocates 40% of its income to debt repayment, only 60% remains to cover all other expenses, including education, food, healthcare, transportation and other household costs.
“This situation places considerable pressure on families and significantly limits their ability to save or set aside funds to deal with unexpected expenses,” he told Le360.
He added that relatively modest incomes, combined with persistently rising living costs, have made household budget management increasingly difficult, particularly for middle- and lower-income families.
According to the expert, debt payments exceeding 40% of household income represent a worrying threshold. He argued that a debt burden closer to 30% would be more sustainable, allowing families to devote a larger share of their income to consumption, savings and unforeseen expenses.
Kraoui also noted that inflation and rising prices have further weakened households’ financial positions.
“Middle and lower-middle income households are bearing a significant share of this pressure, despite being among the main drivers of the national economy,” he said.
Explaining the increase in the proportion of heavily indebted borrowers, from 32% to 38% in just one year, the expert pointed to the sharp rise in living costs.
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In many cases, he said, families resort to borrowing because their expenses exceed their income.
He stressed that borrowing to purchase a home or a car differs significantly from taking out consumer loans to cover household expenses, buy furniture, finance travel and vacations, or pay for costs associated with family events.
The expansion of this type of borrowing, he argued, suggests that many households no longer earn enough to meet their needs.
“Consumer loans are exhausting household income,” he said, describing them as one of the main factors behind the sharp increase in debt burdens over the past year.
According to Kraoui, the consequences extend beyond individual household budgets and ultimately affect consumption and domestic demand.
A household with little room for savings or discretionary spending on leisure, tourism and services inevitably becomes more constrained in its purchasing decisions, a trend that could eventually slow economic activity.
Asked whether rising debt levels could lead to an increase in loan defaults, the expert warned that continued inflation and higher prices for essential goods could further intensify the financial pressure on families.
If current trends continue, he said, households could face greater difficulties repaying consumer loans, particularly in the absence of measures aimed at improving purchasing power and controlling prices.
These concerns come as non-performing household loans reached 47 billion dirhams in 2025, marking a 5.8% increase. The default rate remained stable at 10.3% of total household lending.
To reduce the risks associated with excessive indebtedness, Kraoui urged families to adopt a more cautious approach to managing their monthly budgets by prioritizing essential expenses and avoiding the use of consumer loans to cover recurring shortfalls.
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“Families should adjust their spending and reduce their expenses rather than fall into a monthly financial deficit that pushes them into a cycle of consumer borrowing,” he said, warning of the long-term consequences such a pattern can have on a household’s financial balance.
He also emphasized the importance of diversifying sources of income, arguing that relying on a single source of revenue has become increasingly difficult amid rising living costs.
Having multiple sources of income, whether through additional employment, home-based activities, or contributions from other family members, can help ease financial pressure and improve household financial stability.
