Consumers Attitudes towards Debt: Empirical Evidence from Morocco

Consumers Attitudes towards Debt: Empirical Evidence from Morocco

Nicolas Hamelin (S. P. Jain School of Global Management, UAE), Ayantunji Gbadamosi (University of East London, UK), Sofia Mohaouchane (Al-Akhawayn University, Morocco) and Imane Benelkaid (Al-Akhawayn University, Morocco)
DOI: 10.4018/978-1-5225-0282-1.ch003
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The purpose of this study is to depict the attitude of Moroccan consumers towards the concept of debt, as well as examine factors triggering their intentions to get a loan. A sample of 310 Moroccans was selected across four cities of the country, namely: Fes, Meknes, Rabat, and Casablanca. Social factors are critically analyzed to understand why the Moroccans' debt has accumulated considerably despite the fact that many of the respondents who are Muslims find interest based loans religiously unacceptable. This research reveals that because respondents view themselves as limited in options, they see financing purchases through debt as a viable solution. The study shows that Moroccans are willing to take loans specifically for education, housing and cars. This study concluded that loans permit some people to be socially accepted and allows them to enjoy life. The implications of the study are discussed in the chapter.
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Introduction And Background Information

As the world is characterized with a plethora of changing consumption practices, consumers are exposed to many new products on a daily basis and have to make decisions as to whether to buy them and how this can be achieved. These decisions include which brands to choose, when to purchase, and which lucky companies can benefit from these purchases (Durvasula & Lysonski, 2010). Throughout the consumer experience, many factors contribute to the act of consumption, such as family, friends, income and a number of marketing stimuli such as advertising and sales promotions (Solomon, et al. 2013; Gbadamosi, 2013; Szmigin & Piacentini 2015). Considering the aspect of purchasing power, consumers are guided by their income. While household income is an important determinant of consumption, many do not have enough income to meet their wants and needs. This leads to the necessity of finding new sources of money to allow them to fulfill consumption aspirations. With this process as an easier way of acquiring products, consumption becomes more convenient for consumers as well as lending companies.

Morocco provides an interesting case study where findings can be generalized to the rest of the developing world. A North African country of about 32.2 million inhabitants as of 2011 the vast majority of which are Muslims (HCP, 2011), Morocco has a GDP per capita of 3,092.61 USD as of 2013, experiencing a growth of 4.4%. (World Bank, 2014).

According to the “Haut Commissariat au Plan” (HCP), Morocco’s national statistical agency, a Moroccan family of five needs a monthly income of around 181 USD to live above the poverty line based on the cost of a food basket providing 1,984 kcal per person per day. The poverty line is around 404.18 USD per person per year in urban areas and 379.73 USD in rural areas. Yet the average monthly income of Moroccan family was 398.68 USD in 2007 for rural families and 618.81 USD for urban families. (HCP, 2011). A large segment of the Moroccan population belongs to the lower to lower middle income categories (see Table 1) and are increasingly likely to consider taking a loan. Consequently, the amount of loans has accumulated to 4.13 billion USD in 2006 with an increase of 16% from 2005 (Ministry of finance, 2010).

Table 1.
Annual disposable income: Morocco (Euromonitor, 2011)
‘000 Households20062007200820092010
Above US$5005,9086,0436,1826,3206,459
Above US$1,0005,8586,0046,1566,2946,434
Above US$5,0003,6154,0534,6894,8234,932
Above US$10,0001,3091,6082,1792,2602,311
Above US$25,000236287375391406
Above US$45,000109125138142152
Above US$75,0005867737580
Above US$150,0002529313234

Key Terms in this Chapter

Luxury: Non-essential products or services that provide pleasure and comfort.

Social Factors: Factors that revolve around how people relate with one another in the society.

Debt: The state of owing someone or institutions money to meet certain needs.

Values: Relatively enduring indicators used by people which signal that a specific mode of conduct is preferable to another.

Attitude: A person’s learned consistent evaluation of people or something such as an object, an idea or issues.

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