where to find 12 billion dirhams to support activities?

INAt the time of their success, participating banks are powerless to see the large gap that is widening between their financial resources and the funding they provide. In this first quarter of 2022, outstanding funding reached 20 billion dirhams since the start of this activity, while resources stagnated at 8 billion dirhams. The origin of the disease is well known, and we have repeatedly mentioned it in our columns.

This is a problem of perception among consumers who see these banks as financial companies, rather than full-fledged banks, where they can open an account, accumulate savings and carry out all day-to-day banking operations. , and on more favorable terms. (without agios, without valuation dates, etc.). Participating banks are partly responsible for this, as they focused their communication on financing at launch.

Ultimately, this results in an employment rate of 250% for partisan banks versus 100% on average for the market, including party and regular banks. Thus, the resource becomes more expensive for participating banks, which limits their margins compared to conventional ones, which are already well established and are much more powerful in terms of distribution and equipment for customers.

Wakala bil Istitmar, the only real means of refinancing at the moment

Thus, the participating banks find themselves in a gap of 12 billion dirhams. To do this, Wakala Bil Istitmar is the only Sharia-compatible way to mobilize resources quickly. These vocals are deposits made by donor banks. These resources are then converted into funding by participating banks (Mudarib).

Originally allowed for parent companies of participating banks, Moudaraba was then extended to institutional investors. But “institutions are not yet confident in this tool because it is based on mudarabi, or the loss is insured by the investor,” said Abdelaziz El O’Hadryhiri, Commercial Development Director of Bank Al Yousr, during an online meeting hosted by the Moroccan Association of Financial Professionals.ive (AMFP). According to him, such a perception should be qualified, as the mudarib is also responsible in case of negligence or non-compliance with the contract. Therefore, he must do everything possible.

Demonstrate financial engineering

Abdelaziz El Waddhiri represents the Bank Al Yousr case, which is based on small room for maneuver available to the banking industry with the participation of standard contracts approved by the Supreme Council of Ulema to develop as many products as possible. Thus, the bank has created a committee of financial engineering, which allows it to meet the needs of all enterprises. Remember that Bank Al Yousr has managed the corporate market, becoming one of the most developed participating banks in this segment of customers.

Salam, which is a product that meets the needs of companies in terms of unallocated resources, has become the workhorse of this bank, which has also positioned itself on branded commitment products. Bank Al Yousr’s onslaught in the corporate market is measured by its market share in Tamwilcom’s windowed products, where Al Yousr is the leader. These are all examples that, according to the official, show that partisan banks can cope with the lack of resources through financial engineering.

Drawing inspiration from international practice

The problem of liquidity of Islamic or ethical banks exists elsewhere. Anas Patel, President and Founder of 570easi and Corporate Financial Specialist in the sector, proposed a solution during the meeting. For him, one of the most effective ways to keep these banks afloat is to launch Sukuks to refinance his real estate portfolio. But these sukuki are relevant and relevant only when the portfolio is predominantly in the Ijara format, which is not the case in Morocco, where participating banks produce exclusively Murabaha. Another solution could be to pool banks’ demand for funding by issuing pooled refinancing instruments for the entire region and mobilizing additional resources.

A solution that may interest institutional investors with a size effect. El Wadrhiri also mentions the securitization of real estate banks’ assets as a solution to free up resources. Be that as it may, the sector is experiencing strong commercial development, and this liquidity crisis cannot hinder its development, at least for now. The arrival of Takaful, in turn, should accelerate the development of these banks by offering coverage to individuals who take financing while developing education, retirement or real estate savings to better prepare customers and attract new relationships for these banks and thus strengthen deposits. “Resources need much more time and customers to grow to meet the rapid increase in funding,” summarizes Abdel Aziz El Waddhiri.