Participative finance in Morocco refers to the banks and windows licensed by Bank Al-Maghrib since 2017 to offer interest-free Murabaha, Ijara, Musharaka or Salam, each product requiring a compliance opinion from the Sharia committee attached to the Higher Council of Ulema.
Why 'participative' rather than 'Islamic'
Moroccan lawmakers chose the term participative banks, already used in banking law 103-12 which came into force in 2015. This neutral vocabulary stresses risk sharing and the absence of interest, without changing the reference to Sharia.
Before 2015: the era of so-called alternative products
In 2007 Bank Al-Maghrib authorised so-called alternative products, Murabaha, Ijara and Musharaka, sold by conventional banks. Heavier taxation than a standard loan and the lack of a national Sharia framework limited their take-up.
What the participative banking title provides
Law 103-12 defines permitted operations, prohibits charging or paying interest and creates investment accounts. It requires every product, standard contract and circular to be submitted to the Sharia committee for an opinion before being marketed.
The Sharia committee for participative finance
Attached to the Higher Council of Ulema chaired by the King, this national committee issues compliance opinions on products and on Bank Al-Maghrib's texts. Banks therefore have no autonomous Sharia board deciding doctrine on its own.
First licences in January 2017
Bank Al-Maghrib authorised five participative banks and three windows, most of them born from a partnership between a Moroccan group and a Gulf institution. Branch openings followed during 2017 in the Kingdom's main cities.
Examples of local and Gulf partnerships
Umnia Bank combines CIH Bank with Qatari partners, Al Akhdar Bank brings together Crédit Agricole du Maroc and the Islamic Corporation for the Development of the Private Sector, while Bank Assafa is a subsidiary of Attijariwafa bank.
Home Murabaha, the dominant product
Most outstanding financing funds home purchases: the bank buys the property, then resells it to the client with a margin fixed at signing and payable in monthly instalments. Unlike a variable-rate mortgage, the total price no longer changes.
Tax neutrality and the double transfer
Finance laws adjusted registration duties and VAT so that the double sale inherent in Murabaha costs no more than a conventional loan. Without this neutrality, the resale of the property would have borne the duties twice.
The 2018 sovereign sukuk backed by public buildings
In October 2018 the Treasury issued a first Ijara sukuk of one billion dirhams, backed by administrative buildings. It gives participative banks a compliant asset in which to place surplus cash and to support refinancing with the central bank.
Takaful market opening after Law 87-18
Law 87-18 introduced Takaful insurance into the insurance code. The first ACAPS licences came in 2022, first for Takaful operators and then for six participative banks allowed to distribute Takaful products to their own financing clients as intermediaries.
Covering home finance without conventional insurance
Before Takaful, Murabaha clients had to take out conventional death and disability cover, which scholars criticised. Borrower Takaful now covers the outstanding amount through a pooled fund fed by participants' contributions, with any surplus handled under the fund's rules.
Investment accounts and deposit guarantee
Investment accounts based on Mudaraba do not guarantee capital: profits and losses are shared. Current accounts, by contrast, fall under a deposit guarantee fund specific to participative banks, which is kept separate from the one covering conventional banks.
Specialist external source
The Bank Al-Maghrib website publishes circulars on participative banks, the Sharia committee's opinions on products and the annual banking supervision reports.