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Kenya needs firm foundation for rollout of Sukuk
Participants at an Islamic banking seminar. Sukuk is the Islamic equivalent of bonds, and it is structured in such a way as to generate returns to investors without infringing on Islamic law (which prohibits riba or interest). FILE PHOTO | NATION MEDIA GROUP
Over the years, the world has seen steady growth of the global Sukuk market. Sukuk is defined as a certificate of equal value representing undivided shares in ownership of tangible assets and services. Sukuk is an instrument for raising capital, usually referred to as an Islamic bond, tradeable on the securities exchange.
The fundamental difference between a Sukuk and a conventional bond is that the latter represents a debt obligation owed by the issuer to the bondholder while Sukuk represents beneficial ownership in the underlying asset. Sukuk can be issued by corporates or governments.
