A Comparative Analysis of Participatory and Conventional Banks in Morocco: Customer Perceptions and Liquidity Challenges

Abstract

This study examines the role and challenges of Moroccan participatory banks, with a particular focus on bank liquidity, in comparison with conventional banks. Since their introduction in 2017, participatory banks have experienced steady growth, mainly driven by the expansion of Murabaha financing, especially in the real estate sector. However, this development is accompanied by a structural imbalance between deposits and financing, reflecting persistent liquidity constraints. Unlike conventional banks, participatory banks rely more heavily on external refinancing due to a relatively weak deposit base, limited product diversification, and constraints linked to Sharia-compliant financial mechanisms. In addition, the study highlights the importance of customer perception, which is generally positive but characterized by a low level of understanding of participatory financial products. Empirical findings show that better financial knowledge improves customer perception and increases the intention to use participatory banking services, which in turn may enhance deposit mobilization and strengthen the liquidity position of these banks.