The first Islamic bank in Morocco, Umnia Bank, has opened its doors five months after the country’s central bank approved requests to open Islamic financial institutions.
Islamic banks and insurers are setting up in Morocco after new legislation allowed them into the market, and the central bank has set up a central sharia board, a body of Islamic scholars, to oversee the sector.
The North African country long rejected Islamic banking because of concern about Islamist movements, but its financial markets lack liquidity and foreign investors, and Islamic finance could attract both of those.
Umnia Bank, a joint venture of Qatar International Islamic Bank (QIIB) and Moroccan lender Credit Immobilier et Hotelier S.A. (CIH Bank), opened a total of three agencies in the country on Monday, including two in Casablanca and one in Rabat.
The bank plans to open more branches throughout the country, it said in a statement.
On Tuesday afternoon, Umnia Bank’s branch in Rabat attracted a significant amount of clients, including people simply curious about Islamic financing.
“I have an account with CIH Bank and I just came by here to learn more about what the difference is,” said one client.
Umnia Bank, attached next to a CIH Bank branch, is just a few blocks away from the forthcoming Dar Assafaa, Attijariwafa Bank’s Islamic finance subsidiary.
“As a Muslim, I’m happy we finally have Islamic banks in the country,” said Ritaj, a mother of three, who drove three hours from Tangiers to open an account.
The branch was still ironing out technical problems. The director still had not received details for a prospective client about margins for a murabaha transaction — one of the Islamic instruments that is compliant to sharia law.
Morocco is the most advanced of North African neighbours in developing Islamic finance. Tunisia and Algeria are also starting to explore the banking based on religious principles which avoid interest and pure monetary speculation.
Islamic finance has been growing over the past decade as it broadens its investor base across the Middle East, North Africa, Africa and southeast Asia, tapping into conservative religious clients.