Morocco is planning to allow Islamic banking for the first time in the country this year to tap the $1.7trn industry.

The North African nation, which currently has investment-grade rating from Standard & Poor, approved a draft Islamic finance bill earlier this month to regulate Islamic banks and allow sukuk sales, reported Bloomberg News citing lawmaker Abdeslam Ballaji.

Demand for financing that complies with Islam’s ban on interest is accelerating worldwide, with assets expected to climb to $3.4 trillion by 2018 from about $1.7 trillion last year, according to Ernst & Young LLP.

More than 95% of Morocco’s population of 34 million back the introduction of banking that adheres to Shariah, according to Said Amaghdir, secretary general of the Moroccan Association of Participative Financiers, an Islamic finance business association.

Moody’s Investors Service senior-credit officer Khalid Howladar told Bloomberg News as saying that Muslim retail customers generally prefer to bank Islamically even if there are higher costs.

Howladar further said that Shariah-compliant products are typically more expensive when they’re first introduced.

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"Islamic banks historically have tended to grow at twice the rate of conventional banks in Muslim countries, and as such they tend to take a market share from the conventional system," Howladar added.