Morocco’s Islamic finance sector shows continued momentum, as financing for housing under the Murabaha model surged to MAD 23.8 billion by the end of September 2024, up from MAD 20.9 billion MAD a year earlier, according to data from the country’s central bank, Bank Al Maghreb (BAM).
The latest figures, released by Bank Al-Maghrib, indicate that Murabaha financing for housing grew by 13.7% over the past year, underpinned by the broader uptick in household borrowing, which increased by 1.1%.
Murabaha financing, a non-interest-based structure that complies with Sharia law, has demonstrated remarkable growth since its debut in Morocco in 2018.
From 2019 to 2020, the model posted an impressive 75% annual growth, marking the highest expansion rate in Morocco’s banking sector.
Morocco is currently home to five Islamic banks and three participative banking services within conventional institutions.
Despite being the last Arab nation to pass laws facilitating Islamic finance, Morocco has made several pivotal moves to bolster the sector.
In January 2022, the first Takaful insurance institution debuted in Morocco, designed to provide insurance products that align with Sharia law. The same month, two prominent Qatari banks partnered with Morocco’s CIH banking group to introduce a new Takaful insurance service.
The growth of Morocco’s Islamic finance ecosystem forms part of a broader global trend. Islamic finance, dominated by Middle Eastern institutions, is valued at a total market cap of USD 2.2 trillion as of 2021.