Islamic Banking Struggles to Gain Traction in Morocco’s Financial Sector

"Customers’ expectations far exceed the capabilities of the new emerging Islamic banks in the country," said Abdulsamad Issami, Chairman of the Board of Umniah Bank, the first Islamic finance bank in the kingdom. Furthermore, statistics indicate that these banks have not achieved the government’s objectives for a highly competitive banking sector, leading to a new plan for the operation of banks.

The Moroccan authorities have indicated that the return of Islamic banks to Morocco has been counterproductive. The activities of these banks are minimal. And Moroccans do not give them credit.

For his part, Nabil Badr, Deputy Director of the Banking Supervision Department of [Bank Al Maghrib (BAM)], said that Islamic banks have nevertheless made efforts to establish themselves in the Moroccan financial landscape. According to him, the total amount of financing by Islamic banks is around $620 million last June, representing an increase of about 25% compared to the previous year.

According to Nabil Badr, the development of Islamic banks requires time, as well as greater public awareness of Islamic financial services and banks offering a better range of products. "Islamic banks in countries with long experience in Islamic finance have taken decades to generate significant revenues, which means that their development in Morocco will also be gradual," argued the Deputy Director of the Banking Supervision Department of BAM.