DIGITAL SUKUK ISSUANCE FOR BUSINESS FINANCING

Hazik Mohamed

Chapter 3 in Beyond Fintech:Technology Applications for the Islamic Economy, 2020, pp 43-67 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Research consistently show that small- and medium-sized enterprises (SMEs) face greater constraints on access to finance than large firms, due to issues of information asymmetry, lack of collateral, and higher cost of servicing loans. In view of the large contribution of SMEs to output and employment in emerging Asian economies, it is critical to enhance the access of SMEs to finance in a way that is consistent with sustainable growth and financial stability. In this chapter, the author recommends putting asset-backed bonds on the blockchain to enable transparency and put forth steps to automate cumbersome processes in asset-backed bond issuances, in order to reduce costs and improve efficiency. Significant advantages of using technology to operationalize trust and instil confidence in properly structured and executed financial instruments will also be discussed. The author will also make these recommendations on the basis of fulfilling a gap in traditional bond issuances, which is currently occupied by the loan markets.

Keywords: Ethics and Technology; Digital Transformation; Regional Development; Customer Behaviour; Evolution of FinTech; Global Landscape; Payments; Asset under Management; InsurTech; Investments; Cloud Computing; Big Data Analytics; Blockchain; Internet of Things (IoT); Robo Advisors; Artificial Intelligence; Machine Learning; Islamic Finance; Endowment; Intellectual Property; Fraud Detection; Risk Mitigation; Cost-Effective; Increased Productivity; Immutable; Know Your Client (KYC); Media Rights; Coordination; Efficiency; Consensus-building; Agility; Scalability; Innovation; Cybersecurity; Collaboration; Venture Capital; Enterprise Solutions; Era of Digitization; Digital Ecosystem; Disruptive Models; Market Insights; Predictive Analytics; Insurance; Takaful; Capital Markets; Distributed Ledgers (DLT); Wealth Management; Islamic Markets; Sharing Economy; Trust Mechanism; Open Platforms; Web and Mobile; Cloud Computing; Trades and Settlements; Regulatory Controls; User Defined; Institutional Economics; Cryptocurrency (Tokens); Public Registries; Smart Contracts; Securities Clearing; Automation; Enforceability; Claims Processing (search for similar items in EconPapers)
JEL-codes: G1 G11 G2 O3 O32 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (2)

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