Cut the loofah into small pieces and put them into a coffee/spice grinder.
Here I've got two "grades" of ground loofah. On the left, I moistened the loofahs a bit before grinding them. The result is a much more fibrous, moss-like loofah. You would just place a bunch of this into your mold like the full size loofah sponge.
On the right, I ground the sponge dry. You can see the bits are much smaller.
You can keep grinding dry loofah until it's almost powder. If you grind this finely, you'll need to stir it into the soap before you pour the soap into the mold.

