Al Bawaba
Published via SyndiGate.info
Morocco is poised to have its first full-fledged Islamic bank as early as September as the only North African country rated investment grade seeks to tap the $1.8-trillion industry.
Dar Assafaa, an affiliate of the country’s largest lender AttijariWafa Bank, will probably become the nation’s first wholly Shariah-compliant financial institution when the central bank approves its switch, according to the Moroccan Association of Participative Financiers. The country introduced a law in January to regulate Islamic financial products and allow local and foreign banks to set up units that comply with the religion’s ban on interest.
“By September or October the first Shariah-compliant bank will start,” said Said Amaghdir, the chairman of the association. “Morocco’s financing needs are huge, especially in project finance, and the stability we enjoy here will act in favor of Morocco.”
Political stability relative to neighbors has helped Morocco progress in an industry that’s stalling elsewhere in North Africa. Shariah-compliant finance in Egypt was derailed after Mohammad Morsi’s Islamist government was overthrown in 2013, while Libya has slipped into political chaos following the ouster of Moammar Gadhafi in 2011. Even in Tunisia, which directly elected its president for the first time in November, a debut sukuk sale has been delayed at least three times.
Morocco is rated BBB- at Standard & Poor’s, the lowest investment grade, while Egypt is B-, six levels into junk. Tunisia is rated Ba3 by Moody’s Investors Service, three levels below investment grade. Algeria and Libya aren’t rated. The country’s Islamic finance bill, which came into force on Jan. 30, also allows for the formation of a centralized Shariah board to oversee Islamic banks.
The Moroccan Association of Participative Financiers estimates total investment in Shariah-compliant products in the country will reach $7 billion by 2018. About $1.8 billion in assets are held by Islamic financial institutions worldwide, according to S&P.
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