Mourabaha, Ijara, Musharaka: the 3 Structures Compared

Three contracts, three mechanics of ownership and payment. Compare them in numbers, not labels.

By the Namup team, Updated July 2026

The banker said "Mourabaha", the cousin said "Ijara", the agency across the street offers a conventional loan, and you just want three simple answers: who owns the property during the contract, what do I pay each month, and what does it cost in total. That is exactly what this article compares, contract by contract, then against a conventional loan. In numbers and schedules: the only ground where an honest comparison is possible.

Where these three contracts come from

Nothing exotic: all three structures are defined by Morocco's banking law, law n° 103-12, which created the participative banks and describes their products in its article 58¹. The first branches opened in 2017, and the market is now real: outstanding participative housing finance reached 29.7 billion dirhams at the end of 2025, up 19.3% in a year according to Bank Al-Maghrib figures reported by the press⁴. One data point simplifies your reading: real-estate Mourabaha alone represents more than 82% of participative outstandings⁴. Three structures exist in law; at the housing counter, one dominates by far.

Mourabaha: a sale at a fixed, known-upfront margin

Mourabaha, often spelled Murabaha in English, is the structure you will meet first. The statute fits in one sentence: it is a contract by which a participative bank sells its client a specified asset it owns "à son coût d'acquisition augmenté d'une marge bénéficiaire, convenus d'avance", at its acquisition cost plus a margin, both agreed upfront¹. The mechanics, step by step: the bank buys the asset, then resells it to you at a price equal to its cost plus a margin, and you pay that price on the agreed schedule.

The mathematical consequence is the product's signature: the total cost is a number frozen on signing day. Purchase cost + margin = your price, in dirhams, known before the first instalment. There is no rate running: there is a price. On income tax, Morocco's General Tax Code in fact treats that margin exactly like loan interest for a main home: it is deductible within the same 10% limit of taxable income, a parity in place since the 2010 finance law⁵, completed on the VAT side by an alignment of the rate applied to the margin⁶.

Ijara Montahia bi-tamlik: the lease that ends in ownership

Second structure, second ownership logic. Ijara is the contract by which the bank "met, à titre locatif, un bien … propriété de cette banque, à la disposition d'un client", makes an asset it owns available to a client as a rental; and in its Ijara Montahia bi-tamlik form, at the end of the lease "la propriété du bien … est transférée au client selon les modalités convenues entre les parties", ownership is transferred to the client on the agreed terms².

Reread the key words: property of the bank. For the whole duration of the contract, the owner is the bank; you pay a rent defined in the contract, and ownership only reaches you at the end, on the agreed terms. Mathematically, your total cost is the sum of the rents plus the final transfer conditions: its legibility therefore depends entirely on what the contract freezes or leaves adjustable. The questions to ask before signing are those of a tenant who will become an owner: who insures, who maintains, what happens if the contract stops early, and on exactly what terms ownership passes.

Musharaka Moutanakissa: the co-ownership that steps back

Third logic: partnership. Moucharaka, in the law's spelling, is a contract for the participation of a participative bank in a project with a view to profit, where "les parties supportent les pertes à hauteur de leur participation et partagent les profits selon un pourcentage prédéterminé", parties bear losses in proportion to their stakes and share profits at a predetermined percentage; in its Moutanakissa (diminishing) form, "la banque se retire progressivement du projet conformément aux stipulations du contrat", the bank withdraws progressively from the project as stipulated³.

Applied to a home, the practical mechanics are a decreasing co-ownership: the bank and you hold the property together, its share shrinks over the contract while yours grows, until full withdrawal. Your monthly payment therefore combines two things: the progressive buyout of a share, and the remuneration of the share the bank still holds. It is the most flexible structure on paper and the rarest at the housing counter today, where Mourabaha dominates⁴.

The three structures, side by side

Against a conventional loan: compare in numbers, not labels

A conventional mortgage is built on a rate: each month, interest is computed on the outstanding capital, and the total cost depends on the rate, the term and the repayment pace. In Morocco the dated reference exists: real-estate loans averaged 5.13% in the first quarter of 2026 according to Bank Al-Maghrib, overwhelmingly at fixed rates⁷. Mourabaha, by contrast, is built on a price: cost plus margin, frozen at signing.

That difference in nature has very concrete schedule consequences, in both directions:

• In a conventional loan, interest runs on the outstanding capital: repaying earlier or faster mechanically reduces the total cost (subject to the penalties set in the contract).
• In a Mourabaha, the price is frozen: the margin does not "run", it is owed like a sale price. Early repayment does not mechanically reduce it; any rebate belongs to the contract's clauses or the institution's gesture, not to an automatic recalculation.
• The only referee is the total cost at equal amount and term: add every instalment and every fee, subtract the property's price, and compare what remains. Neither the word "rate" nor the word "margin" tells you, by itself, which of the two is cheaper: the calculation does.

That is exactly what our Mourabaha calculator does, free and without sign-up: you set the price, the margin, the term, and you see the instalment, the total cost and the schedule against a conventional loan, line by line.

Whatever the contract: a commitment, and a place in your plan

Mourabaha, Ijara, Musharaka or a loan: once signed, the instalment is a commitment, ranked with your rent and your bills. That is Namup's answer to the surrounding confusion: the app files that instalment under your obligations, shows the share already paid and the total cost remaining, and your month fits in one calculation, income − commitments − savings = what you can spend. Understand what you sign, then see where you stand every month: clarity on both sides of the signature.

Try it in 60 seconds, free, no card. See my monthly plan →

Frequently asked questions

Is a Mourabaha more expensive than a conventional loan?

Neither more nor less expensive by nature: they are two different cost mechanics, a frozen price versus a running rate. At equal amount and term, compare the total cost of the two real offers in front of you, fees included; margins and rates alike are dated commercial terms, specific to each institution. The calculator runs that comparison in a minute.

What happens if I repay early?

It is the most discriminating schedule question. In a conventional loan, interest stops running on what you repaid, subject to contractual penalties. In a Mourabaha, the sale price remains owed; any reduction depends on the clauses. Before signing either: read in black and white what the contract says on this chapter.

In an Ijara, who pays the insurance and major repairs?

The law sets the structure (the bank owns, you rent until the transfer), not the fine allocation of charges: that belongs to each contract's stipulations. It is precisely the point to have spelled out in writing, because it weighs on your real total cost.

Are these financings reserved for certain clients?

No. They are ordinary banking products in the law's sense: participative banks are licensed credit institutions, open to any client, and you can compare their offers with any bank's, on the numbers alone. That is this article's whole point: three structures, one conventional loan, and a single measuring tape, the total cost.

1. Law n° 103-12 on credit institutions and assimilated bodies (promulgated by dahir of 24 December 2014), title III "Banques participatives", article 58 a): « Tout contrat par lequel une banque participative vend à son client un bien meuble ou immeuble déterminé et propriété de cette banque à son coût d'acquisition augmenté d'une marge bénéficiaire, convenus d'avance. Le paiement par le client au titre de cette opération est effectué selon les modalités convenues entre les deux parties. » Official text, PDF hosted by Bank Al-Maghrib, consulted July 2026. ↩
2. Law n° 103-12, article 58 b): « Tout contrat selon lequel une banque participative met, à titre locatif, un bien meuble ou immeuble déterminé et propriété de cette banque, à la disposition d'un client pour un usage autorisé par la loi », in two forms: « Ijara tachghilia », a simple lease, and « Ijara Montahia bi-tamlik, lorsqu'au terme de la location, la propriété du bien, meuble ou immeuble, loué est transférée au client selon les modalités convenues entre les parties. » ↩
3. Law n° 103-12, article 58 c): « Tout contrat ayant pour objet la participation, d'une banque participative, à un projet, en vue de réaliser un profit. Les parties supportent les pertes à hauteur de leur participation et partagent les profits selon un pourcentage prédéterminé », in two forms: « Moucharaka Tabita », held to term, and « Moucharaka Moutanakissa : la banque se retire progressivement du projet conformément aux stipulations du contrat. » ↩
4. Outstandings and market structure, Bank Al-Maghrib figures reported by the press: Infomédiaire, 10 February 2026, citing BAM's credit-deposits dashboard: outstanding participative housing finance of "29,7 milliards de dirhams" in 2025 versus 24.9 billion in 2024, up 19.3%, driven "principalement par la Mourabaha immobilière", infomediaire.net; Maroc Diplomatique, 26 June 2025, citing BAM: total participative outstandings of "34,65 milliards de dirhams à fin février 2025", of which real-estate Mourabaha "accapare plus de 82 % des encours". maroc-diplomatique.net. Consulted July 2026. ↩
5. Moroccan General Tax Code, article 28-II: deductible "dans la limite de 10 % du revenu global imposable", for the purchase or construction of a main home, "le montant de la rémunération convenue d'avance entre les contribuables et les établissements de crédit et les organismes assimilés dans le cadre d'un contrat « Mourabaha »", on the same footing as "le montant des intérêts afférents aux prêts"; provision introduced by article 7 of finance law n° 48-09 for budget year 2010 (the CGI's own note). CGI, official PDF, consulted July 2026. ↩
6. Upsilon Consulting, "TVA et finance participative au Maroc", 16 May 2026: "La marge de la Mourabaha est soumise à la TVA au taux de 10 % avec droit à déduction (art. 99-B-1°)", under a neutrality principle: a client financing through a Mourabaha "ne doit pas supporter une charge fiscale différente de celui qui contracte un prêt conventionnel". upsilon-consulting.com, consulted July 2026. Consultancy source, not official. ↩
7. Bank Al-Maghrib, quarterly survey on lending rates, first quarter 2026 (release of 8 May 2026): overall rate 4.66%, "5,13 % pour les prêts immobiliers"; and annual banking supervision report 2024, p. 90: 93% of the housing-loan stock at fixed rates. bkam.ma, consulted July 2026. ↩