The list of the best Islamic banks in Morocco

Islamic finance made a notable entrance in Morocco with the establishment of participatory banks, the official name the Moroccan regulator gives to Islamic banks. These institutions offer products and services that comply with Sharia (Islamic law), which entails the prohibition of interest (riba) and the promotion of profit-and-loss sharing between the bank and its customers. Morocco, the last large North African country to introduce this banking model, put in place a dedicated regulatory framework and a central Sharia Committee reporting to the Council of Ulemas, to oversee the compliance of operations. Since their launch, Moroccan participatory banks have drawn growing interest from customers looking for ethical financial services, even if their market share remains modest against that of conventional banks.

Bank Al-Maghrib, the central bank of Morocco, initially granted licences to five separate participatory banks. Most of these are joint ventures between large Moroccan banking groups and well-known foreign Islamic financial institutions, with the notable exception of Bank Assafa, which is wholly owned by a Moroccan group and has no foreign partner. Alongside the creation of these new banks, three large conventional banks were authorised to open “participatory windows”, meaning dedicated counters within their existing network, in order to offer Islamic banking products under separate brands. Taken together, these initiatives allowed a complete participatory banking sector to emerge quickly. The recent arrival of Takaful insurance solutions (Islamic insurance) and the issuance of sovereign sukuk (Islamic bonds) round out this ecosystem, giving participatory banks the tools they need to sustain their development over time.

Umnia Bank is the product of a partnership between the Moroccan bank CIH Bank (Crédit Immobilier et Hôtelier) and Qatar International Islamic Bank (QIIB), with the participation of the Caisse de Dépôt et de Gestion (CDG), a shareholder in CIH. It was the first participatory bank to open its doors in Morocco, marking the official start of the sector. Its head office is in Casablanca and the bank quickly built a branch network covering the main cities of the Kingdom. Drawing on QIIB’s international expertise in Islamic finance, Umnia Bank was able to offer a full range of Sharia-compliant products from the outset: interest-free current and savings accounts, Murabaha financing offers, in particular for the acquisition of property and cars, everyday banking services such as bank cards and cheques, and other ethical solutions. The bank places the emphasis on service quality and innovation, with the stated ambition of playing a leading role in the development of Moroccan participatory finance in the years ahead.

Bank Assafa is the participatory bank of the Attijariwafa bank group, the leading banking group in Morocco. Notably, Bank Assafa is the only one of the Moroccan Islamic banks with no foreign partner: it is 100% owned by its shareholder Attijariwafa bank, which makes it an entirely Moroccan participatory bank. Launched in 2017 in the wake of its peers, it builds on the earlier experience of “Dar Assafaa”, an Attijariwafa bank subsidiary that had been offering alternative finance products, such as Murabaha home financing, for several years before the participatory legal framework came into being.

Thanks to this accumulated in-house know-how and to the backing of the largest banking group in the country, Bank Assafa was able to roll out its activities quickly and broaden its product range. It now offers varied services for retail customers, professionals and businesses: interest-free current accounts, Murabaha financing for housing or equipment, participatory savings products and more. With a network of branches spread across Morocco, Bank Assafa emphasises its purely Moroccan identity and its integration into the powerful Attijariwafa group, so as to build a climate of trust and closeness with customers who are looking for ethical financial solutions backed by a well-established banking player.

BTI Bank, an acronym for “Bank Al Tamwil wal Inma”, meaning “Bank of Financing and Development” in Arabic, was born of an alliance between the Bank of Africa group, formerly BMCE Bank of Africa and one of the main private Moroccan banking groups, and Al Baraka Banking Group, an Islamic banking group from Bahrain present in many countries. This joint venture combines Bank of Africa’s knowledge of the local market with the international expertise of Al Baraka, a global pioneer of Islamic finance. BTI Bank started operations with a first branch in Casablanca and aims to extend its presence gradually to other cities of the Kingdom.

The bank offers a range of Sharia-compliant products aimed at retail customers and businesses alike. It covers everyday accounts and payment methods, Murabaha financing solutions for property, cars or professional equipment, and services for businesses seeking participatory financing, such as Islamic leasing or compliant working-capital financing. Building on Bank of Africa’s network and diversified customer base, BTI Bank aims to serve a broad user base, including SMEs wishing to benefit from Islamic financing. The creation of BTI Bank also symbolised the confidence of foreign investors in the Moroccan market: seeing a pan-African banking player and a Middle Eastern group join forces in this way underlines the potential they attribute to participatory finance in Morocco.

Bank Al Yousr is the participatory bank launched by the Banque Centrale Populaire (BCP) group in partnership with Guidance Financial Group. BCP, a Moroccan bank with a cooperative structure and one of the national leaders, holds the majority of Bank Al Yousr’s capital, while Guidance, an international group specialising in Islamic financial services and in particular in sharia-compliant home financing in the United States and the Middle East, brings its technical know-how and its expertise in Sharia-compliant products. Bank Al Yousr has its head office in Casablanca and started trading after obtaining its licence in the summer of 2017.

From its launch, Bank Al Yousr set out to position itself as a benchmark universal participatory bank. It intends to cover the full range of customer needs gradually, through a network of dedicated branches and a complete range of Islamic products and services. Its offers include interest-free accounts, Murabaha financing for the acquisition of homes or vehicles, the management of participatory investment accounts, and other suitably adapted everyday banking services. Drawing on the commercial strength and the regional presence of the Banque Populaire group, Bank Al Yousr seeks to reach a wide public across the country, including in less urban areas, by offering ethical and accessible banking solutions. Its name, “Al Yousr”, evokes the notion of ease and comfort, reflecting its determination to make participatory finance simple and open to all.

Al Akhdar Bank is the participatory institution launched by the Crédit Agricole du Maroc (CAM) group in partnership with the Islamic Corporation for the Development of the Private Sector (ICD), a multilateral financial institution belonging to the Islamic Development Bank (IDB) group. In this joint venture, Crédit Agricole du Maroc, a Moroccan public bank historically geared towards financing the farming sector and rural areas, holds 51% of the capital, while the ICD holds 49%. The choice of the name “Al Akhdar”, which means “the green one” in Arabic, echoes the agricultural calling of the parent company and symbolises the growth and prosperity this new participatory bank is aiming for.

Al Akhdar Bank began trading by opening a few strategically located pilot branches, in Rabat and Casablanca for example, as well as in areas of intensive farming activity. It plans to extend its network gradually, including into rural areas, so as to serve farming customers and agri-industrial SMEs looking for Sharia-compliant solutions as effectively as possible. Like its peers, Al Akhdar Bank offers current accounts and conventional banking services adapted to Islamic finance, Murabaha financing products for equipment, property or the purchase of farm machinery, and plans to develop specific products such as the Salam contract, a Sharia-compliant instrument for pre-financing harvests, to meet the needs of the farming sector. By capitalising on the field knowledge and the extensive branch network of Crédit Agricole du Maroc on the one hand, and on the support of an international Islamic institution on the other, Al Akhdar Bank aims to contribute to the financial inclusion of rural populations and to the funding of development projects in an ethical and sustainable way.

In addition to these five independent participatory banks, Morocco has participatory windows inside certain already established conventional banks. More precisely, three large banking groups have launched Islamic counters integrated into their branch networks:

• Dar Al Amane, the participatory arm of Société Générale Maroc.

• BMCI Najmah, the participatory window of BMCI (BNP Paribas group).

• Arreda, the participatory window set up by Crédit du Maroc, at the time affiliated to the Crédit Agricole France group.

These dedicated counters operate inside the existing branches of the parent banks and allow the latter to offer their customers Sharia-compliant products without having created a separate subsidiary. In practice, a customer of Société Générale, BMCI or Crédit du Maroc can go to certain branches carrying the Dar Al Amane, Najmah or Arreda label to open a participatory account, take out Murabaha financing or obtain an Islamic bank card, while staying within the world of the traditional bank. The move reflects the determination of these large groups not to remain on the sidelines of participatory finance and to offer an Islamic alternative to their loyal customers. The activity of these specialist counters is nevertheless smaller in scale to date than that of the full participatory banks, the latter enjoying an independent structure and a brand image built entirely on Islamic principles, which attracts customers specifically looking for that positioning.

The progress of the participatory banking sector in Morocco is encouraging, even if it starts from a modest level compared with the volume of the banking market as a whole. To keep gaining ground, these new players will have to meet several challenges. First, they will need to keep up the effort to educate the public about the principles and the advantages of Islamic finance, in order to dispel any misunderstanding or reluctance. Second, they will have to diversify their offers further: by developing corporate financing through Musharaka (investment partnership) or Mudaraba arrangements, by broadening the range of participatory investment accounts, or by offering credit cards and other innovative services compatible with Sharia. Another sizeable challenge for these banks is optimising the management of their surplus liquidity within Islamic rules, which means creating suitable financial instruments, such as domestic sukuk or Islamic interbank markets, to place that surplus in a compliant way.

The context is nevertheless moving in the right direction. The arrival of Takaful insurance now gives customers the option of covering their assets, whether home, vehicle or health, with insurance policies that comply with Islamic precepts, filling an important link that was missing from the ecosystem. Moreover, the Moroccan monetary and religious authorities are giving this young sector continued support: Bank Al-Maghrib is gradually adjusting the regulations to accompany the rise of the participatory banks, while the central Sharia Committee makes sure clear legal opinions are issued to give both the banks and their customers certainty.

In the long run, Islamic banks in Morocco aspire to establish themselves as a full and complementary pillar of the national banking landscape. They intend to help diversify the sources of financing available to the economy and to meet the demand for a more ethical and equitable finance coming from a growing section of the population. If their growth continues at its current pace, these participatory banks could take an increasingly significant place, while remaining faithful to their founding mission: reconciling modern financial needs with the values and principles of Sharia, for the benefit of the economic and social development of the country.