Debtor Notification and Consent in Moroccan Claim Assignments

When a bank transfers a non-performing loan to another party, a threshold legal question arises: does the borrower need to consent? The answer under Moroccan law is nuanced — consent is generally not required, but notification is, and the mechanics of notification affect whether the transfer is opposable to the debtor and third parties. For investors acquiring NPL portfolios and for banks disposing of them, understanding these requirements is essential to structuring a valid transaction.

This article examines the legal framework governing debtor consent and notification in Moroccan NPL transfers, the practical implications for transaction execution, and the open questions that participants should address.

The general principle: no consent required

Under Moroccan civil law, a creditor may generally assign a receivable without the debtor's consent. The debtor's obligation is to pay; the identity of the creditor to whom payment is owed is, from the debtor's perspective, a matter of form rather than substance.

This principle derives from the Dahir formant Code des Obligations et des Contrats (DOC), which governs contractual obligations in Morocco. Articles 189 to 197 of the DOC address the transfer of obligations and establish that receivables are, in principle, transferable.

However, the principle admits exceptions and qualifications that matter in practice.

Contractual restrictions

Loan agreements may contain provisions restricting assignment. Common formulations include:

• Prohibition on assignment without borrower consent
• Requirement of prior notice before assignment
• Limitations on the categories of permitted assignees

The enforceability of assignment restrictions varies. In some jurisdictions, such clauses are enforceable between the parties but not opposable to a good-faith assignee who was unaware of them. Moroccan courts' treatment of such clauses in the NPL context is not extensively reported.

For banks structuring portfolio sales, identifying and addressing contractual restrictions is part of the preparation process. Options include:

• Obtaining borrower consent where required (burdensome for large portfolios)
• Excluding exposures with problematic restrictions from the perimeter
• Seeking legal opinions on the enforceability and impact of restrictions
• Relying on statutory override provisions (where applicable)

Notification requirements

Even where consent is not required, Moroccan law requires notification to the debtor for the transfer to be fully effective.

Under the DOC

The DOC provides that a transfer of receivables is not opposable to third parties, including the debtor, until the debtor has been notified or has acknowledged the transfer. Prior to notification:

• The debtor may validly pay the original creditor (the cedant)
• Third parties may acquire rights against the receivable through attachment or competing assignment
• The assignee's claim is vulnerable to challenge

After proper notification:

• The debtor must pay the assignee
• The assignee's rights are protected against competing claims
• The transfer is fully effective erga omnes

Form of notification

The DOC does not prescribe a specific form for notification. In practice, notification is typically effected by:

• Formal notice (mise en demeure) delivered by bailiff (huissier)
• Registered letter with acknowledgment of receipt
• Direct acknowledgment signed by the debtor

For large NPL portfolios, individual bailiff notification of each debtor is operationally impractical. Mass notification by registered mail is more common but carries execution risk — letters may not reach debtors, particularly where addresses are stale.

Notification under Law 33-06

For transfers to an FPCT under Law 33-06, specific notification provisions apply. Article 20 of the law establishes a simplified notification regime:

• The transfer may be notified by ordinary letter
• A prescribed period after dispatch, the transfer is deemed notified
• The simplified process reduces the operational burden for large portfolios

This is one of the advantages of the FPCT structure for NPL transfers — the statutory notification mechanism is lighter than the general civil-law requirement.

Notification under Draft Law 02-26

Draft Law 02-26, which proposes a specific framework for NPL transfers, includes provisions on debtor notification. However, since the draft is not promulgated, these provisions are not currently operative.

If enacted, the law may establish a standardised notification process for NPL assignments, potentially including:

• Published notice in addition to individual notification
• Deemed notification after specified periods
• Regulatory oversight of the notification process

Guarantor notification

Where loans are supported by personal guarantees (cautionnements), the question arises whether guarantors must be notified of the assignment.

Guarantors are not debtors in the same sense as the principal borrower, but their obligation is accessory to the principal debt. The transfer of the principal receivable carries with it the associated guarantees, but the guarantor's obligation to pay the new creditor may depend on notification.

Prudent practice is to notify guarantors of the assignment, even if the legal requirement to do so is debatable. A guarantor who claims ignorance of the assignment may seek to complicate enforcement proceedings.

Practical implications for NPL transactions

For sellers

Banks preparing NPL portfolio sales should:

• Review loan documentation for assignment restrictions
• Plan the notification process and timeline
• Consider whether FPCT structure offers notification advantages
• Allocate responsibility for notification costs and execution

In bilateral sales, the sale agreement will typically specify which party is responsible for notification and the consequences of notification failures.

For buyers

Investors acquiring NPL portfolios should:

• Understand the notification status of each exposure at acquisition
• Ensure the sale agreement provides for valid notification
• Build notification execution into the post-closing workplan
• Price the risk of notification failures appropriately

An exposure for which notification fails — because the debtor cannot be located, for example — presents enforcement complications. The buyer may still have rights against the cedant under the sale agreement, but recovery against the debtor is impaired.

For servicers

Servicers managing transferred portfolios must track notification status and ensure that collection efforts are conducted in the name of the correct creditor. Pursuing a debtor in the name of the original lender after transfer can create legal complications.

Debtor challenges to assignment

Even where consent is not required and notification has been effected, debtors may challenge assignments on various grounds:

Procedural challenges

The debtor may argue that notification was defective — wrong address, wrong form, not received. Courts will examine the evidence of notification and may reject claims of non-receipt where the creditor can demonstrate proper dispatch.

Substantive challenges

The debtor may argue that the underlying debt is invalid, disputed, or already discharged. These are not challenges to the assignment per se but to the underlying obligation. The assignee steps into the cedant's position and is subject to the same defences the debtor could have raised against the cedant.

Public policy challenges

In theory, a debtor might argue that an assignment violates public policy — for example, that selling debt to a "vulture fund" is contrary to good morals. Such arguments have found limited traction in other jurisdictions and would face sceptical reception in Moroccan commercial courts, but they illustrate the range of arguments debtors may attempt.

The role of borrower relationships

While legal consent may not be required, practical considerations may favour engagement with borrowers.

For borrowers who are still operating and potentially able to restructure, the arrival of a new creditor can be disruptive or, conversely, can create an opportunity for fresh negotiation. How the new creditor introduces itself may affect the likelihood of consensual resolution.

For borrowers who are uncooperative or absconded, the consent and notification requirements are largely academic — the path is judicial enforcement, not negotiated settlement.

The segmentation of a portfolio by borrower circumstances should inform the approach to notification and outreach.

Open questions

Several aspects of debtor consent and notification in Moroccan NPL transfers remain uncertain or untested:

Cross-border dimension

Where the assignee is a foreign entity, does that affect the validity or process of notification? Moroccan law does not generally discriminate based on creditor nationality, but practical questions may arise about service addresses and enforcement jurisdiction.

Data protection

The transfer of borrower personal data from cedant to assignee raises data protection considerations. Morocco's data protection law (Law 09-08) governs the processing of personal data, and the transfer of loan files containing borrower information should comply with its requirements.

Litigation in progress

For exposures already in court proceedings, the substitution of the assignee for the cedant as claimant requires procedural steps. The mechanics depend on the stage of the proceeding and may require court approval or at least notification to the court and opposing parties.

Serenor Capital's role

Serenor Capital advises banks and investors on the operational and analytical aspects of NPL portfolio transactions, including the planning and execution of notification processes. We do not provide legal advice — that requires engagement of Moroccan legal counsel — but our work includes:

• Portfolio segmentation by assignment and notification complexity
• Coordination with legal workstreams on transaction structure
• Cost modelling for notification execution
• Risk assessment of notification failure scenarios

For related analysis, see Morocco NPL Sale Process and FPCT for NPL in Morocco.

Sources

• Dahir formant Code des Obligations et des Contrats (DOC), Articles 189-197 on transfer of obligations
• Law 33-06 relative à la titrisation de créances, Article 20 on notification
• Law 09-08 relative à la protection des personnes physiques à l'égard du traitement des données à caractère personnel
• Draft Law 02-26 on the transfer of non-performing loans (transmitted to SGG; not promulgated)
• Bank Al-Maghrib, Rapport Annuel sur la Supervision Bancaire — Exercice 2025 (June 2026)