The government of Morocco has given the go-ahead to Credit Agricole for setting up an Islamic banking subsidiary in the country.

The subsidiary will be created with the support of the Islamic Development Bank (IDB).

Credit Agricole will own 50% of the subsidiary as a joint venture with the IDB. The partners will infuse MAD200m ($20.5m) into the unit, with plans to double the amount to MAD400m later.

Bank Al Maghrib, Morocco’s central bank, said that it is currently in the process to launch an Islamic finance industry.

It has pledged to issue Islamic banking permissions by the end of 2016, with banks expected to start operations from early 2017.

“Credit Agricole of Morocco aims to position this bank as a major actor in the Moroccan participative banking sector, mainly in the rural areas where a large part of the population does not deal with conventional banks,” an official statement said.