Sukuk

‘Sukuk’ is a Shariah-compliant Islamic financial product and resembles bonds in conventional finance.

Conventional bonds are structured on the basis of debt whereas sukuk are basically investment certificates consisting of ownership claims in a pool of assets or business activity that is Shariah-compliant.

Sukuk adhere to an Islamic view of finance, avoiding Riba (generating money from money i.e. interest or usury) whereas conventional bonds are securities that are interest based.

Sukuk are Islamic financial instruments issued by Governments or Corporates to raise money from investors for a period of time to finance their business ventures or government projects like construction of roads, railways, electricity dams and others.

Sukuk distribute periodic coupon payments from the profit generated in the pool of assets or business activity. At the end of this Sukuk period, known as maturity date, issuers pay back the money raised from investors, known as the principal.

Mapato Sukuk is an Islamic bond issued by KCB Bank Tanzania Limited through its Islamic Banking Window known as KCB Sahl Banking and is offered to both retail and corporate investors.

Yes. The Mapato Sukuk is a Shariah-compliant investment endorsed by the Shariah Advisory Board of the Center for Islamic Finance, Compliance and Advice (CIFCA) and by the independent Shariah Advisory Board of KCB Sahl Banking.

The Mapato Sukuk is issued under the Shariah principle of Mudharabah.

Mudharabah is a profit-sharing contractual arrangement between an investor (Rab al Maal) and a managing trustee (Mudharib). The Mudharib invests the funds provided by the investor in permitted business ventures and returns to the investor the principal and a pre-agreed share of the profit.