Morocco
Morocco is a recent entrant in the Islamic finance sector and currently does not have its Islamic fund
management industry. With the introduction of the bill on participation funding (Law No 103-12
released in 2015), the legislative mechanism to accomplish the growth of industry started in 2014. In the
year 2017, the industry hit new heights with the licensing of 8 Islamic banks (known as participation
banks) in the Moroccan central bank, Bank Al-Maghrib (BAM). In mid-2017, the banks began operations,
providing shariah-compliant lending products for automobile and real estate transactions.
Morocco is still in its infancy with numerous parts of the Islamic financial sector evolving. It is still being
conceived and incorporated in its administrative system and technology establishment. Morocco is
undergoing several financial sector reforms, especially with a view to developing a robust ecosystem for
Islamic finance. They take stock, sukuk and Islamic funds to the growth of their Islamic banking industry,
taka industry, and Islamic capital markets.
This research on Morocco aims, with a specific emphasis on the asset management sector, to delineate
the current growth of its business in Islamic finances. We will address Islamic capital markets in general
and the management of Islamic funds in particular problems and opportunities for growth. Morocco is
selected as the country case study Factors that follow:
• Something that Morocco has just begun to encourage Islamic finance is an emerging industry in the
area of MENA. In its vision of expanding the different segments of the Islamic Finance sector, the
country receives strong government support.
• In comparison with other OIC countries, the demand in Morocco is still small. As such it complies with
the criterion of 'infancy' in traditional and islamic funds with low level of growth.
• Although the majority of OIC-African countries fell into 'childhood,' Morocco has comparatively easier
access to info.
Overview of Morocco’s Islamic Finance and Islamic Fund Management Industries
Marocco was last listed (48th) in 2017 in the growth of Islamic banking and finance in 2017 in the Islamic
Finance Country Index (IFCI), which was established by Edbiz Consulting in 2011. The rating was revealed
at a time when in Marocco the implementing process of the multiple sector-enhancing reforms had yet
to begin. Its Islamic banking industry only launched in 2017, featuring eight banks involved.
The growth of the Muslim banking and finance industries in Morocco is in line with the efforts the
country has made to restore its financial markets following the repercussions of the 2007-2009 global
financial crisis that have impacted liquidity and reduced foreign investments. The position was that,
considering Morocco's strategic relationship with Europe, Africa and the gulf region, Islamic finance
would draw both liquidity and foreign investment. The evolution of the Islamic funding markets also
suits the vision of Casablanca Finance City (CFC) as international business hub and leading financial
center in Africa, as amended, and implemented in December2010, as amended, and Islamic Fund
management as completed by Law 68-12 of June2014. Islamic Finance growth complements and
strengthens the provided financial services and enhances Casablanca's appeal and dynamism as a
leading financial hub in Africa. Casablanca was 32nd among African financial centers in the 2018 Global
Financial Center Index and first in the lead from Johannesburg (52nd) and Mauritius (56th), respectively
(GFCI 23, 2018). It is projected to become more important in the near future among the 15 financial
centers.
The financial structure of Morocco relies primarily on the banking sector and the growth of the stock
market begins to emerge. The Bank's banking system, which accounts for approximately 140 per cent of
GDP (IMF, 2016), is the largest in the country. This illustrates the policy of Islamic banking in the world
before considering expanding other parts of the Islamic financial industry, including taka and Islamic
capital markets.
The IMF's Morocco Financial Sector Assessment Study (2016) states that its financial structures (banking,
insurance and pension funds), as seen in Chart 4.17, have achieved equivalent amounts to high income
countries. The insurance industry in the country accounts for 8% of GDP and is associated with the
banking and wealth management industries. The banking structure also involves micro-credit and
financial partnerships with 10.5 percent of GDP's reserves. The new banking legislation was introduced
in 2014, and independent regulators for the markets in the financial markets and the insurance industry
(Autorité de Contrôle des Insurances et de la Prévoyance Sociale, ACAPS, Morocco) began strengthening
their regulatory and regulative structure. The banking authority is Bank Al-Maghrib and the treasury and
finance ministry regulates policies and growth of the financial sector.