دورية
Ṣukūkstructure for deficit financing during COVID-19 crisis
| العنوان: | Ṣukūkstructure for deficit financing during COVID-19 crisis |
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| المؤلفون: | Sa’ad, Auwal Adam, Muneeza, Aishath, Haron, Razali, Othman, Anwar Hasan Abdullah |
| المصدر: | Islamic Economic Studies; November 2022, Vol. 30 Issue: 1 p23-41, 19p |
| مستخلص: | Purpose: This paper identified the ṣukūkstructure suitable for deficit financing during the COVID-19 crisis. The study also explored the relevant Sharīʿah contracts that could be utilized to issue ṣukūkthat is suitable for various jurisdictions and corporations in handling deficit financing during the COVID-19 crisis. Design/methodology/approach: The authors have adopted a qualitative research approach in which primary and secondary sources available on the subject were reviewed, especially a number of cases related to ṣukūkstructures prior to and during the COVID-19 crisis and analyzed their performances and drawn their conclusions. Findings: The outcome of this paper suggests that certain ṣukūkstructures used during the COVID-19 crisis aimed primarily at financing deficit have been successful. Furthermore, these ṣukūkstructures are relied very much on the obligator’s/issuer’s cash flow position. It has been revealed that if the ṣukūkis structured on equity-based contracts with lower repayment amount or no payment, it would not trigger default because the nature of this ṣukūkis the sharing of profit and loss, in accordance with a Sharīʿah rule that there will be compensation for any loss only if deliberate and notable negligence is proven. However, if it is debt based or ijarah and wakalah contracts, then the payment to ṣukūkholders ought to be made as agreed and if not, it will trigger default. This payment is to be made from the cash flow of the issuer and if there is an issue in the cash flow of the issuer due to COVID-19, consent from the ṣukūkholders needs to be obtained to reschedule payment as found in the case of the Garuda Indonesia ṣukūk. However, as found in MASB’s IMTN ṣukūkcase, if the cash flow of the company is good, then the chances of default are very slim. However, so far, three new ṣukūkin the middle of COVID-19 were issued, one by a corporation and two issued by a sovereign, one of which addresses the liquidity issues during the pandemic, and all these proved that ṣukūkis definitely a viable alternative mode for deficit financing and a reliable option during the COVID-19 pandemic. Research limitations/implications: This paper looked into the ṣukūkstructure, especially the ṣukūkwhich are yet to mature and the new ṣukūkissued during the crisis caused by the COVID-19 pandemic. Practical implications: It is anticipated that the outcome of this research will assist the stakeholders in ṣukūkmarkets to understand the ṣukūkimpact on COVID-19 related deficit financing and suggest various structures that could be utilized in the ṣukūkmarket in an unprecedented situation such as the COVID-19 economic distress. Social implications: Looking at the social aspect of ṣukūkmarkets, this paper has endeavored to provide solutions to the financing of deficit for social well-being as a tool to provide relief and social stability in the lives of the people. Originality/value: The novel COVID-19 pandemic has caused unprecedented economic difficulties and market distress on a global scale; and this research sought to identify the relevant ṣukūkstructures to be used for deficit financing during the pandemic crisis, especially the ṣukūkwhich are yet to mature and new ṣukūkissued during the pandemic crisis. The former includes HDFC Muḍārabah ṣukūk(2019) Maldives and MAHB ṣukūk/IMTN program (2010) Malaysia, while the latter includes IsDB Trust Certificates, Phase 2 of the tranches (2020), the Federal Government of Nigeria Road ṣukūk(May, 2020) and Sharj’ah Government two billion Dirham ṣukūk(June, 2020). |
| قاعدة البيانات: | Supplemental Index |
Full Text Finder | تدمد: | 13191616 24113395 |
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| DOI: | 10.1108/IES-01-2021-0007 |