Participatory banks in Africa: Theoretical review of the Moroccan experience

Abstract

The African continent is continuously affected by Islamic finance, thanks to its banking products and microfinance offered by Islamic financial institutions in the Maghreb and West African regions, we examine the Islamic financial model and its prospects for global development. Islamic finance remains relatively little present in Africa, even though more than 400 million Muslims live there. There are 37 such banks in Africa. After the implementation of the banking law that regulates the operation of participatory banks on the Moroccan financial market, Islamic banking or "participatory banking" was recently introduced in Morocco.

This new financing system, which is based on the principle of sharing profits and losses, encourages certain clients and investors to deposit and invest their funds in participatory banks, and allows various economic actors who were excluded from the financial market to participate. The aim of the article is to highlight a literature review and a documentary study in order to present the history and evolution of Islamic finance in Africa, and the experience of participatory banks in Morocco in particular, as well as the possibilities of making it a financing alternative.Although official data on the weight of Islamic finance in Africa do not show an expansion comparable to that experienced by this sector, for example, in Asia or even in Europe, it can be assumed that certain indicators, not directly quantifiable, testify to an increasingly important presence of this finance which is becoming globalized.

Keywords:  Islamic economy and finance, Participatory banks in Africa, Islamic banking products

Classification JEL : G21

Paper type: Theoretical Research