Real estate loans: towards a change of the rules of granting

In its edition of Monday, September 2nd, the Economist announces this change, relying on a project that the central bank seems to have opened two years ago. In fact, the banks of the place forward in the last two years a precise reporting to Bank Al-Maghrib on the "LTV", a ratio calculated for each customer and which is the ratio between the value of the property and the amount of credit that the client has contracted for its financing, as well as on the "DSTI", the ratio between the debt charges and the income.

These are two risk management tools for banking institutions that the central bank seems to be very interested in. The work within the institution should lead to the establishment of a limit for the DSTI and the introduction of a sectoral "cushion" of capital to address banks' exposure to risk in the context of real estate financing.

With regard to LTV, attention is now focused on the banks' requirements for personal contribution in the processing of credit files, as well as on funding exceeding the amount for a reason or another, the real value of the good. Everything therefore suggests that changes should occur in the management of the LTV and the DSTI in order to better protect the banks against the risks of real estate financing, as well as to better regulate the real estate market by acting on the demand emanating unsecured borrowers.

As a reminder, according to central bank data reported by the EconomistOn average, bank customers contribute 30% of the value of real estate assets from own sources. In 2018, the interest rate applied to them averaged 6.4%, for an annual production of 27.3 billion dirhams.