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Islamic Banking in Morocco


Morocco can be considered the most advanced of North African neighbours in developing Islamic finance. One of Africa’s largest and most sophisticated economies, Morocco is taking assertive measures to boost its infrastructure and make itself more appealing to foreign investors, and this includes being a Muslim-friendly investment destination. The Kingdom is making efforts in positioning itself as an attractive Islamic finance market as it endeavors to make its regional financial hub (Casablanca Finance City) ambition come true.

Regulatory Environment

Since passing an Islamic finance bill in November 2014, Morocco has continued working toward strengthening its regulatory framework to facilitate Shariah compliant banking and financial services. In February 2015, the Higher Council of Ulemas established a new commission dedicated to Islamic banking and in July the same year, the Ministry of Finance and Economy approved an earlier circular outlining the banking licensing process including for Shariah compliant units.

Banking and Finance

Morocco’s financial system is considered the most efficient in the MENA region because of its competitive and sophisticated capital market; its insurance industry that is positioned as the second largest in Africa and its mature and developed banking sector.
While official regulations were not passed until 2014, several Islamic banking products such as Ijarah, Musharaka and Murabaha were made available via conventional banks since 2007, although the take-up was limited. There were efforts to launch an Islamic window via Bank Wafa; however, that failed following political oppositions. It was in January, 2017 that the Bank Al-Maghrib, Morocco’s central bank, announced the approval of five banks to provide Sharia-compliant products and services. The new legislation uses the phrase ‘participatory’ banking, rather than ‘Islamic’ banking, in a bid to encourage private firms to operate independently from the question of religion. The central bank has also established a central Shariah board to oversee the industry. Three of the five authorized institutions are leading
national banks, while the central bank has also given approval for the subsidiaries of three leading French banks to offer Islamic products.


In May 2015, the Moroccan government approved an insurance bill which introduced the concept of Shariah compliant insurance and details guidelines for running takaful and re-takaful operations including the segregation of funds and Shariah governance. The central bank is considering establishing an Islamic interbank market and working on sovereign treasury Sukuk issuances in order to support the Islamic finance industry.

Future Outlook

The demand for Shariah finance services in the North African country is significant as demonstrated by the number of foreign players keen to expand their geographical footprint into the market.
projected to be worth US$7 billion by 2018, less than 5% of the expected total market share, according to the Moroccan Association of Participative Financiers. Islamic finance opportunities may be lucrative in Morocco, with many eager to jump at them; however, in order for the potential to be realized, the regulatory infrastructure needs to be further bolstered such as in the areas of Islamic insurance and tax. The country will also need to look at developing Shariah liquidity instruments, as at present, Morocco’s financial market lacks liquidity and foreign investment. The introduction of Islamic banking will therefore help increase financial inclusion, investment stability and accelerate economic development for the nation. It has also been predicted that there will be a rise in the use of contactless payments and Sharia-compliant credit cards.


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