Assessment of Sharia-Compliant Risk Management Framework for Sukuk
Keywords:
sukuk, risks, methods, controlling.Abstract
Islamic finance is distinctively characterized by the pivotal role of risk in delineating the boundary between Sharia-compliant and non-Sharia-compliant profit. This distinguishing feature permeates all Islamic financial transactions and instruments, including Sukuk. This paper delves into the concept of sukuk, the underlying causes of risks associated with sukuk issuance and trading, and the methods employed to effectively control these risks within Islamic financial institutions, with a focal emphasis on Sharia-compliant approaches. Sukuk stands as a noteworthy financial instrument within the Islamic finance landscape, having experienced intentional growth due to its prominence in financing ventures. However, akin to other financial instruments and securities, Sukuk is not immune to various inherent risks. Given that risk is an inherent element of the Islamic economic system, sukuk carry their own unique set of risks. This paper explores both general and specific methods used to mitigate and manage the risks associated with sukuk issuance, adopting a qualitative research approach drawing from secondary data. The study reveals that sukuk, as a financial instrument, falls within the category of low-risk products, and the identified risks can be effectively managed through a range of meticulously crafted mechanisms. This paper serves as a valuable contribution to the understanding of Sukuk, shedding light on their risk profile and the Sharia-compliant strategies employed to navigate these risks, further enhancing the stability and attractiveness of Islamic financial instruments.
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