An independent evaluation-based cost-benefit analysis (ECBA) of the Millennium Challenge Corporation’s (MCC) Morocco Financial Services Project (FSP) reveals striking economic returns from microfinance investments. Conducted by Limestone Analytics, the ECBA estimates a 44.7% economic rate of return, exceeding MCC’s 10% threshold for cost-effectiveness.
Funded as part of MCC’s $697.5 million Morocco Compact, the FSP injected over $30 million into microcredit lending through Jaida, a Moroccan financial institution. These funds enabled microcredit associations to offer loans to small and often underserved entrepreneurs, many of them women, across rural and remote regions.
The ECBA found that beneficiaries increased their income significantly, with returns on microfinance loans reaching as high as 140%. The analysis draws on rigorous performance and impact evaluation data and includes sex-disaggregated benefits, identifying that women received about 51% of total loans.
Notably, the ECBA also introduced a new benefit stream by accounting for the long-term residual value of funds that continue circulating post-investment.
These findings underscore the transformative potential of targeted financial access programs. They demonstrate how microfinance, when properly designed and supported, can generate substantial economic value for individuals and communities alike.
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