Thursday, May 23, 2024
ReportMalaysians show support for government’s first digital Sukuk

Malaysians show support for government’s first digital Sukuk

The Malaysian government’s first digital Sukuk offering, the Sukuk Prihatin, has received overwhelming demand from its people, leading the finance ministry to upsize the issuance to meet the orderbook.

Initially targeting to raise RM500 million (US$120.7 million), the retail offering made available to the public for the first time through mobile-enabled digital avenues, attracted over RM666 million (US$160.77 million) in orders, leading the government to upsize the offering by RM166 million (US$40.07 million).

Proceeds from the two-year issuance will be used to enhance connectivity to rural schools, support research on infectious diseases and finance micro-entrepreneurs. It is part of the government’s 6R strategy (Resolve, Resilience, Restart, Recovery, Revitalize and Reform), a plan outlined by the ministry in June 2020 to mitigate the effects of the coronavirus crisis.

The Sukuk Prihatin facility was first announced in June 2020, a retail Sukuk facility designed specifically to allow investors (both individuals and businesses) to contribute to Malaysia’s economic recovery in the wake of COVID-19. This offering is a significant one because unlike in neighboring Indonesia which has several retail Sukuk under its belt, retail Sukuk are few and far between in Malaysia despite the country being one of the largest Sukuk issuers in the world. The decision to sell the Sukuk via mobile banking platforms for the first time, something Indonesia has been doing since 2018, also signals the Malaysian government’s propensity to utilize fintech to drive Islamic finance adoption.


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