Moroccan consumer market ready for Islamic finance
The study was independently commissioned and published by IFAAS (Islamic Finance Advisory & Assurance Services). It sets out the market opportunities for financial institutions interested in developing an offering for the Moroccan consumer market. It provides a full analysis of the consumer demand for Islamic retail banking, finance and Takaful and measures the likely consumer response and take-up to such products.
The report analyses consumers’ current consumption of financial products and services and their attitudes towards conventional, interest-based retail finance. It then gauges their appetite for Shari’ah-compliant retail financial products. This includes their likelihood to take up Islamic loans and savings accounts, their price elasticity towards these products and their likely speed of response to the launch of such products. The subjects of Shari’ah compliance, distribution channels and preferred providers are also covered.
The report summarises its findings:
The level of interest in Islamic financial products and services is very high, at over 90 per cent, within the general public in Morocco. The majority of consumers are dissatisfied with interest-based banking but, having no Halal options, find they are compelled to engage in conventional finance.
Providing the technical Shari’ah compliance aspects are managed properly, Islamic finance poses a significant opportunity for financial institutions in the North African Kingdom.
Following the introduction of an Islamic finance system, the Moroccan retail finance market will see a significant growth in the penetration of banking and finance products amongst consumers. Providers will see a marked shift away from conventional, interest-based, products and the current low banking penetration will change to a high of consumption of assets and liability products.
Commenting on the findings, Farrukh Raza, managing director, IFAAS said, “Islamic Finance in Morocco – Sizing the retail market is the first specialised independent report providing an insight in to the Moroccan consumer’s appetite for Islamic finance products and services. The findings from the report reveal that consumer interest in Islamic finance has the potential to be much bigger than currently expected. The challenge for decision makers is to ensure that their early critical decisions are based on accurate market information to ensure long term success. IFAAS’ report and findings have proved invaluable for many institutions considering their next move.
“Institutions are considering key questions such as whether to focus on customer retention or acquisition, which products to launch first, how to price their new products and how to distribute them. ‘Islamic Finance in Morocco – Sizing the retail market' contains these and other findings and offer a wealth of information that will help shape critical business decisions. It is helping businesses to plan their resources, design their communications and understand what is required to achieve a strong market share in this dynamic market.”
IFAAS commissioned a local research firm to undertake the quantitative survey. Random, face-to-face, street interviews were conducted on a weighted sample size of over 800 individuals, reflecting a true picture of the Moroccan consumer market. The target sample was composed of men and women aged 18 to 55 years, from a variety of socio-economic categories, living in urban and rural areas and consisted of both banked and unbanked groups of the population. In terms of geographical coverage, the study was conducted in towns and surrounding rural municipalities of Casablanca, Rabat, Marrakech, Agadir, Fez, Tangier and Oujda.