Participatory home finance in Morocco reached MAD 32.3bn by the end of August 2026, up 16.3% from a year earlier. The figure, published by Bank Al-Maghrib in its latest bank loans and deposits dashboard, compares with MAD 27.7bn in August 2025. Real estate Murabaha accounts for most of this financing. The product allows customers to buy homes through a Sharia-compliant structure in which the bank buys the property and resells it to the customer at an agreed profit margin.
Household loans also continued to grow. Total lending to households reached MAD 404.4bn, up 3.4% from a year earlier and 2.1% from December 2025.
Housing loans increased by 2.3%, while consumer loans rose by 5.1%.
The figures show that participatory home finance is growing much faster than conventional housing loans. The 16.3% increase in Murabaha financing compares with 2.3% growth in conventional housing loans.
Participatory banking began operating in Morocco in 2017 after Law 103-12 created the legal framework for the sector. Five participatory banks and three banking windows entered the market.
Real estate Murabaha remains the main product. It accounts for more than 80% of all participatory financing.
The process is different from a conventional mortgage. A customer first chooses a house or apartment and agrees on a price with the seller. The customer then approaches a participatory bank and signs a binding promise to buy the property.
The bank buys the property from the seller and takes legal ownership. It then sells the property to the customer at the original price plus a profit margin agreed in advance.
The customer pays this final amount through fixed monthly instalments over an agreed period.
The profit margin is fixed when the contract is signed. Monthly payments therefore do not change because of movements in interest rates or wider economic conditions.
Late payments are also treated differently. Participatory banks cannot use late-payment penalties to generate additional income. Any penalty charged is directed to a charity fund overseen by an independent Sharia board.
Government housing aid has helped make Murabaha more accessible.
The Daam Sakan programme, which runs from 2024 to 2028, provides MAD 100,000 for homes priced below MAD 300,000 and MAD 70,000 for homes priced between MAD 300,000 and MAD 700,000.
Buyers can use the government support as part of the upfront payment required for a Murabaha purchase. The arrangement reduces the amount of money first-time buyers need to provide themselves.
Tax changes have also helped remove some of the early obstacles to Murabaha.
The General Tax Code provides tax treatment designed to keep participatory financing neutral compared with conventional mortgages. The Murabaha profit margin is subject to 10% VAT, matching the treatment applied to conventional mortgage interest.
Social housing purchases worth up to MAD 250,000 can benefit from a full VAT exemption under the same approach used for standard loans.
Takaful insurance has addressed another issue faced by the sector. Sharia-compliant insurance for life and disability is now available for Murabaha financing and forms part of the current structure for new contracts.
The participatory banking sector has also moved closer to profitability.
Participatory institutions recorded a combined net profit of MAD 5m in 2023, compared with a MAD 129m loss in 2022.
The latest lending figures point to continued growth in both participatory and conventional household finance. Murabaha, however, is expanding at a much faster rate, with housing finance rising by 16.3% in the year to August 2026.
