The Role of Sukuk in Sustainable Development

Abstract

Sukuk: Driving Sustainable Economic Development

Abstract Sukuk, or Islamic bonds, have gained popularity as a Shariah-compliant approach for enterprises to obtain capital. In accordance with the principles of Islamic finance, Sukuk plays a key role in supporting sustainable development in addition to its financial rewards. Sukuk may assist fund initiatives that benefit society as a whole, increase risk-sharing among investors, and promote financial inclusion. A recent example of a green Sukuk issued by the Indonesian government highlights the capacity of Sukuk to fund environmentally beneficial initiatives. Sukuk may also be used to alleviate some of the issues that traditional finance faces, such as financial crises, and to enhance accountability and transparency in financial transactions. This article examines the relevance of Sukuk in Islamic finance and its role in sustainable development. This study focuses on the function and influence of Sukuk on human welfare and sustainable development. To attain human well-being and sustainable development, Sukuk investments must be for the benefit of everyone, including people, institutions, society, and the whole nation. The research shows that Shari'ah supervisory boards should focus more on the content when developing Sukuk in order to assist Islamic finance in reaching Maqasid AlShari'ah.

Keywords: Sustainable development Maqasid AlShari'ah, Sukuk, Islamic finance, human well-being, safeguarding wealth.