Established in 1920 originally to finance real estate projects, CIH today is a profitable universal bank that specializes in funding social housing projects in particular

KHALID ALIOUA President of CIH

o you think Moroccan entrepreneurs are sufficient risk-takers?

I think they are becoming more and more so. Today, the banking system is flourishing. People sell in the bank, take money from the bank; they finance their projects not by their own means but by the means of others. They take risks, banks follow them and everybody is winning. But we have to go even further and develop financial packages, new platforms, monitor stock movements and attract capital. Good governance and transparency are essential.

When you arrived at CIH, the bank was loss making and did not have any cash flow. How did you turn it around?

It is a question of risk. When I arrived, CIH had made a loss of 4.5 million dirhams ($550,000). We had to come back to the market without any capital. Nobody wanted to borrow money, but I insisted. So we borrowed and at the end of the year we were out of the red. A year later we increased our turnover by 100 percent and the following year (2006) we tripled our turnover. It was a signal to people that we were in the market again.

We also did a good follow up on some important pending payments. Then the French Caisse d’Epargne wanted a stake in CIH. A French investor showing interest in your bank means that you are doing fine. Our shareholders liked it and decided to increase the capital by $200 million. From this point, the outlook was good as the property market started booming. We also decided to match with the government’s program for social housing by widening access to finance for people with more modest means. People here are now getting used to dealing with credit. Moroccans have a lower credit ratio than the international average

But don’t you have better returns with hospitality or tourism projects than with social housing?

In reality we have better returns with social housing because we have a long-term portfolio with 25-year financing. In the hotel business it is a maximum seven years and in tourism projects it is two to three years. It is the long term that interests me. We give a fixed rate of 6 percent for 25 years and I feel comfortable with that because it is a way of investing in the future and not only in short-term operations. We have accompanied the government’s policy on financing for social housing thanks to FOGARIM – a fund designed to integrate more people into the economy via access to property.

Could you tell us more about your products and services?

We currently have a number of new products under development. We cannot have a housing policy that is only based on acquisitions. We must also develop the rental market. There are people who have a small amount of capital but not enough to invest in a business. If they can buy an apartment, they can rent it out, but they need guarantees. This is where we come in. And it allows us to develop a dynamic activity not only of consumption but also of investment.