Identification and prioritization of the factors influencing the selection of the appropriate Sukuk structure for finance

Abstract

Considering the extent and diversity of the issuable Sukuk structure (Islamic bond or Sharia-compliant bond), determining the factors influencing the selection of the appropriate Sukuk structure for the applicant originators is one of the main issues of the debt market. Therefore, the present study aimed to identify and prioritize the significant components in determining the appropriate structure of Sukuk to finance the different needs of the public and private sectors. The current paper was an applied research in terms of its objective and descriptive-survey in its nature, and structural equation modeling method had used to identify and prioritize the vital components. The research sample comprised experts in financing the country's capital market, and the research data was collected using the questionnaire. In this research, the contributory factors approved by the experts had classified into five main categories, including the components related to the originator, underlying assets and benefits, issuance bodies, structuring, and the Sharia components. The results show, among the above - mentioned five components, those related to underlying assets and benefits have the highest impact, and the one related to the issuance bodies has the minimal effect on the decision of the originators in picking the appropriate structure of Sukuk.

Keywords

• finance
• islamic finance
• islamic financial instruments
• sukuk
• structural equation modeling