Retail Sukuk refers to Sharia-compliant financial certificates, similar to bonds, that are made accessible to individual investors, rather than being limited to institutional investors. These instruments are structured to comply with Islamic finance principles, which prohibit interest (riba) and emphasize asset ownership and profit-sharing. Instead of paying interest, Sukuk holders typically receive returns generated from the profits or rent of tangible underlying assets or projects. The introduction of Retail Sukuk by governments, such as the UAE and Saudi Arabia, aims to promote financial inclusion, encourage long-term savings, and diversify investment opportunities for citizens and residents. They are often government-backed, denominated in local currency, and can be purchased in smaller, fractional amounts through digital platforms of participating banks.
