Moroccan Islamic Banks Show Growth Despite COVID-19 Challenges

Deposit outstandings increased by 20% at the end of October compared to the beginning of the year, reaching 3.5 billion dirhams, while the financing outstandings increased by 35% to 12.3 billion dirhams. "The achievements are still below our ambitions due to this particular context, but we can already boast of having shown growing performance," said a banker.

However, notes La Vie éco, these banks still face refinancing difficulties. With the imperfection of the ecosystem in terms of financing products, the absence of an interbank participatory market and the inability to refinance with BAM, the banks are falling back on "wakala bil istithmar" and, to a lesser extent, on investment deposits, with the former standing at 4.1 billion dirhams, an increase of 28%, while the latter reached 693 million dirhams, more than double their level at the beginning of the year.

Regarding the bulk of "murabaha" financing, it is focused on real estate, with a share of 85%, at more than 10 billion dirhams, an increase of 33% since the beginning of 2020. The outstanding consumer financing reached around 941 million dirhams and that for equipment, 774 million dirhams. This is not unique to Morocco. This situation exists in all countries with participatory banks, with "real estate murabaha financing" taking up a significant share of total financing," said Youssef Baghdadi, chairman of the executive board of Bank Assafa.

Moreover, the persistent absence of "Takaful" insurance constitutes an obstacle to access to participatory banking and the laws are still at a standstill. However, four insurance companies and one reinsurance company have already filed their licensing application with ACAPS. Even if this year is not beyond expectations, bankers remain hopeful. The offer should be more complete with "Musharaka" and "Mudaraba" products, but also with "Takaful" insurance.