Rabat - Islamic financing for housing loans in Morocco grew by 37% year-on-year at the end of February 2022, overtaking housing loan growth from conventional banks. 

Islamic banks issued MAD 16.4 billion in total Murabaha funding for housing loans in  February 2022, according to a recent document from Bank al-Maghrib (BAM), Morocco’s central bank.

This was also a slight increase of the MAD 16.1 billion in Muharaba funding issued for housing loans  in the first month of 2022

Despite making up a small chunk of the overall MAD 233 billion of housing loans issued in Morocco in February this year, Murabaha funding continues to grow in Morocco.

Islamic banking, banking in accordance with Sariaa law, is a relatively new enterprise in Morocco. 

Since its debut in 2018, the sector continued to boast the highest growth out of all other banking sources, with a landslide 75% annual growth between 2019 and 2020.

Morocco’s Islamic landscape comprises five banks: Bank Assafa, Umnia Bank, Al Akhdar Bank, Bank Al Yousr, and Bank al Tamweelwa Al Inma.

The sector equally includes three participative structures within conventional banks dedicated to mobilizing resources to serve customers’ needs: Dar Al Amane, Arreda, and Najma. 

The North African country was the last Arab country to adopt Islamic banking. 

In January 2022, Islamic banking in Morocco welcomed its first Islamic insurance provider, Takaful financing institution, Takafulia Assurance, which opened last month.

In February, another insurance provider backed by state-owned investment, fund CDG debuted in the country. 

In addition to the impressive growth rate within housing loans, customer deposits within Islamic banks have also increased significantly since 2018. 

Deposits increase from MAD 1.4 billion ($154,349 million) at the end of 2018 to MAD 2.3 billion ($253,573 million) in 2019.

Islamic financing is a highly competitive landscape valued at $2.2 trillion in 2021, with major Islamic financing institutions mainly concentrated in the Middle East region.