A CASE FORAN ISLAMIC SOCIAL IMPACT BOND

Abstract

While the premise of Islamic finance is often couched in the principle of maqasid al-shariah and that of risk sharing with claims to social justice and welfare, the impact and contribution to the social sector has been minimal. This paper examines theclaim among critics that there is an inherent weakness of the present day Islamic banking and finance industry in terms of its underdeveloped social sector and argues for the need for new models that will enhance a proliferation of shariah compliant financial products for solutions in the social sector. This paper further examines the framework for a socially responsible investment (SRI) sukuk, launched in Malayia in 2014 and the model of SIB (social impact bond) in the social finance space to come upwith recommendations for structuring a shariah compliant SIB or social sukuk.

Keywords

• ocially responsible investment (sri) sukuk
• social impact bond (sib)
• shariah compliant
• islamic finance
• social financ