Sukuk and Waqf: Proposal of Structures During the Crisis Linked to Covid-19 Pandemic – Case of Morocco

Abstract

The Covid-19 crisis is an unprecedented situation in modern society that requires unique and unprecedented solutions. Islamic finance, as a system that works for the good of the community, is an appropriate solution to this situation. Through its traditional Islamic economic institutions (Waqf and Zakat), and once they are put in collaboration with Islamic financial instruments such as Sukuk, the result will allow new funds to be integrated into the market and used for the purpose supporting activities and populations damaged by the crisis. It is under this aspect that we present this article, which demonstrates that Islamic finance and more particularly Sukuk, can be used as an economic catalyst in the event of crisis. Various studies have examined the issuance of Sukuk; yet no research has ever studied the specific use of Sukuk for protection against Covid-19 or for strengthening populations that were economically affected by the crisis, nor has it display the various Sukuk structures that could be used to empower people or help overcoming the crisis. Our research attempts to understand the basic content of Sukuk issuances and the scope of their use as a tool for economic empowerment in times of crisis. It also provides several past experiences that may support future Sukuk issuance for mitigating and combating the impact of the Covid-19 crisis. Our study both shows successful examples that could be implemented in Morocco and helps predict issues and challenges that could hinder the success of future Sukuk issuances.