Navigating Institutional Forces in Microfinance: Lessons from the Moroccan Ecosystem

Abstract

This thesis explores the institutional forces found in the microfinance ecosystem in Morocco and their implications on microfinance market practices and the operating models of microfinance institutions. Microfinance, as a development tool, aims to bridge institutional voids in the financial system by providing financial services to underserved populations. However, the sector has faced controversies and challenges, particularly with the shift towards a more commercially driven model. Drawing from institutional theory, the study investigates the regulative, normative, and cognitive-cultural pillars shaping the Moroccan microfinance ecosystem. Through qualitative research, including interviews with microfinance practitioners and experts, the study uncovers a hybrid model of the Moroccan microfinance ecosystem characterised by the coexistence of commercial capital provision and a welfarist legal status of microfinance institutions. Findings reveal interplays of institutional forces, with implications for the market practices. The research identifies the need for diversification strategies tailored to the diverse nature of microfinance institutions operating within the ecosystem. Furthermore, policy recommendations advocate for a balanced approach that combines welfarist and institutionalist perspectives to address the ecosystem's challenges effectively. By understanding the nuances of the Moroccan microfinance ecosystem and advocating for tailored strategies, this research contributes to the broader discourse on microfinance and offers insights for policymakers, practitioners, and development experts seeking to foster sustainable growth in the sector.