Islamic bonds

Islamic bonds, known as Sukuk, are financial instruments that comply with Islamic law (Sharia). Unlike traditional bonds, which pay interest, Sukuk represents partial ownership in a tangible asset or project. Investors receive returns based on the asset's performance rather than fixed interest payments. This structure aligns with Islamic principles that prohibit earning money from interest (riba). Sukuk are used to raise funds for various projects, including infrastructure development, and are popular in Muslim-majority countries as a way to invest ethically while adhering to religious guidelines.