The Islamic financial industry is now incorporating social elements and sustainable practises to widen their appeal beyond religiously-minded customers in the Gulf and Southeast Asia.
The Islamic Development Bank (IsDB) said that it plans to design Islamic bonds linked to socially-conscious finance could help mobilise large pools of assets across the Muslim world and increase the impact of Islamic finance.
Said Bouheraoua, Director of Research at the International Shari'ah Research Academy for Islamic Finance (ISRA), said that the multilateral lender has appointed ISRA to advise on the Sukuk worth around $200 million.
In a Waqf-linked Sukuk, proceeds are used for social projects and any excess yield is reinvested in the Waqf assets.
Beyond Waqf, other Islamic financial firms are seeking to use technology such as blockchain to channel money into smaller social projects, reported Reuters.