Morocco: Islamic finance bill to be submitted to Parliament
In Morocco, the current party in power the PJD is about to submit a bill authorising the introduction of Islamic finance.In Morocco, the current party in power the PJD is about to submit a bill authorising the introduction of Islamic finance, Xinhua news agency reports.
The text suggests the establishment of three types of institutions: the Islamic bank, the financial institution affiliated to an Islamic bank and the Islamic financial institution.
Moroccan banks will have the option to completely or partially convert to an Islamic bank.
The new bill is submitted in a context of rapid expansion of the Islamic finance sector.
It is currently worth around $1 billion (€766.5 million) and should reach $1.8 billion in 2016, according to figures from the African Development Bank (AfDB).
This interest is due to the fact that, according to Islamic law, credit cannot be a source of profit and interest is therefore forbidden.
The International Monetary Fund believes this success can also be explained by the fact Islamic banks seem to have resisted the 2008 economic crisis far better than conventional banks, mainly because Islamic finance is based on asset pledge agreements and risk sharing.
Quoted by L'Economiste Maghrébin, Slaheddine Kanoun, Interim Administrator at Islamic Bank Zitouna, said the "enrichment and diversification of financing resources" is Islamic finance's main contribution to the economy.
However in North Africa, this type of finance remains underdeveloped, mainly because of the low level of awareness from potential clients, the limited development of retail banking activities and a lack of support from the governments, according to a report from the AfDB published last December.