Bank Al-Maghrib (BAM) is preparing to boost participatory finance in Morocco in collaboration with the Islamic Development Bank (IDB). As part of a strategic study, the Central Bank aims to identify the obstacles to growth in this sector and to propose appropriate solutions.
Bank Al-Maghrib wishes to give new impetus to participatory finance in Morocco, in collaboration with the Islamic Development Bank (IDB). The Central Bank is planning to carry out a large-scale strategic study to analyze the obstacles to growth in this sector and propose solutions adapted to the national context. This project is a continuation of the efforts initiated since the introduction of participatory banks in 2017-2018, with the main objective of expanding the product offering, better managing liquidity and raising public awareness of the advantages of this financial model.
In-depth studies aimed at improving the regulatory framework
In order to make this initiative a reality, BAM has launched a call for expressions of interest to recruit an expert responsible for supporting the development of participatory finance in Morocco. Its mission will focus on in-depth studies aimed at improving the existing regulatory framework and identifying obstacles to the development of this sector. Among the challenges identified are in particular the constraints linked to the collection of deposits, the diversification of the resources of participatory banks, as well as liquidity management, a major issue for these establishments.
Since the start of the activity of participatory banks in Morocco in 2017, several achievements have marked the evolution of this sector. Among them, the establishment of an appropriate legal and regulatory framework, supported by the IDB through technical assistance aimed at consolidating the participatory finance ecosystem. At the end of March 2024, the sector recorded encouraging results with more than 216,000 accounts opened, demand deposits reaching 9.2 billion dirhams and a total outstanding crowdfunding of 29.2 billion dirhams.
Challenges remain to be met
However, despite these advances, challenges remain. The current study aims to propose solutions for liquidity management, a crucial issue for participatory banks, which lack liquid assets and liquidity risk management instruments. It will also endeavor to diversify the offer of financial products, currently dominated by Murabaha, in order to better meet the needs of businesses and households.
Finally, one of the key aspects of this initiative is to strengthen public financial education regarding participatory finance. The recruited expert will have to assess the level of public awareness and propose appropriate communication programs. The start of this study is planned for December 2024, with financing from the IDB to support this strategic project for the development of the participatory banking sector in Morocco.
