Morocco: Takaful covers 80% of participatory banks' lending
Source: Middle East Insurance Review | Jul 2023
Takaful providers in Morocco cover 80% of participation (Islamic) banks’ financing, according to Central Bank of Morocco (Bank Al-Maghrib) head of research and relations for Islamic financial Institutions Zougari Laghrari.
Speaking at a webinar organised by the British Chamber of Commerce for Morocco, he said that the launch of takaful in 2021 has made it possible to cover the risks associated with shariah-compliant lending operations.
“In a proactive approach, Bank Al-Maghrib, the Insurance and Social Welfare Supervisory Authority and participatory banks worked together on coverage of shariah-compliant financing which was not covered by insurance hitherto,” said Mr Laghrari in a report by Morocco Today.
“We are almost at 80% coverage which is a significant figure,” he said.
Takaful business is still a nascent segment, generating contributions of MAD12m ($1.2m) in 2022, mainly from coverage of real estate murabahah contracts granted by participation banks. This represents 0.022% of the estimated premium income of MAD54.5m of the overall insurance market last year.
At present, participation financial institutions sector in Morocco includes eight banks, as well as a crowdfunding guarantee window, four takaful operators with a retakaful window and three institutions operating on the capital market authorised to issue private sukuk. M