Islamic finance well received in Morocco

Morocco

Islamic finance and banking are on a rapid growth pattern in Morocco, only shortly after the country’s central bank, Bank Al-Maghrib, finally and after several delays in July 2017 officially introduced a comprehensive regulatory framework for what it calls “participation banking” in the north African country. Islamic finance was uncommon in Morocco up to 2015, when the Bank Al-Maghrib began to approve – on a case-to-case basis – requests of conventional banks to open Islamic windows and started the process of formulating clear Islamic banking regulations for the banking industry. The first banks to launch Islamic banking operations were Attijariwafa Bank, BMCE of Africa and Banque Centrale Populaire, as well as Societe Generale Marocaine de Banques, Credit du Maroc, Banque Marocaine pour le Commerce et l’Industrie and CIH Bank. With the latter, a lender focusing of the property and hospitality sectors, Qatar International Islamic Bank entered a joint venture to open the first fully-fledged Islamic banking branch network in Morocco under the name of Umnia Bank back in May last year, Gulf Times reported. Meanwhile, Bank Al-Maghrib governor Abdellatif Jouahri in a review of the new regulations in June this year after the second quarterly meeting in 2018 of the central bank’s board expressed his satisfaction over the development of the “participatory banking” sector. According to him, the country now has more than 70 banks and financial institutions providing Shariah-compliant financial services, which so far granted a total of 1.1bn Moroccan dirhams ($115.3mn) in lending. While the Islamic banking regulations, governed by the Shariah Committee for Participative Finance in the central bank, allows five popular types of Islamic finance transaction, (murabaha, musharaka, ijara, mudaraba and salam), murabaha – a credit sale for a markup – has proven most popular for participation banking clients, which prefer it for real estate and automotive financing, Jouahri said. With fundamental Islamic banking structures now in place, Morocco also readies for the issuance of its first sukuk.—Agencies

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