chapter  7
11 Pages


Meaning, valuation, benefits and challenges
WithMustapha Abubakar, Nasiru Abdullahi

There are several types of sukuk or Islamic bonds; they are classified on the basis of the different Islamic modes of financing used to arrive at their respective structures, the types and nature of the underlying assets, as well as their commercial and technical features. The structures include murabaha, mudaraba, salam, istisna, ijarah and musharaka. Based on underlying assets, sukuk are classified as asset-based or asset-backed. The sukuk segment of the Islamic capital market industry has gained considerable attention from writers due to its growing popularity as an avenue for raising capital by corporate entities among other seekers of funds. This chapter discusses issues related to sukuk such as the evolution and meaning, types and valuation of sukuk, how they differ from conventional bonds, benefits of their use, and the challenges involved, as well as various sharia explanations of sukuk features as currently utilised.