BAKU, June 18, 2026 — The Islamic Development Bank Institute [ IsDBI ] and the Asian Development Bank Institute [ADBI] have jointly unveiled a pioneering study proposing the Ṣukūk Enhancement Fund [SEF] — an innovative mechanism designed to improve the risk profile of ṣukūk and expand access to capital markets, particularly for small and medium-sized enterprises [SMEs].
The report was launched during the 20th IsDB Global Forum on Islamic Finance, held on June 17, 2026, in Baku, Azerbaijan, alongside the 2026 IsDB Group Annual Meetings.
Titled “Ṣukūk Enhancement Fund: A Sustainable, Cost-Efficient Scheme for Enhancing the Risk Profile of Ṣukūk”, the study addresses one of the most persistent challenges in Islamic finance: enabling SMEs to access long-term financing through capital markets despite limited credit histories, perceived risks and high issuance costs.
The proposed SEF introduces a mutualised risk-sharing mechanism through which participating ṣukūk issuers collectively contribute to a protection fund aimed at strengthening investor confidence without relying on external guarantees, government subsidies or additional financing costs.
By transforming fragmented issuer risk into a pooled protection framework, the model seeks to broaden market participation while preserving economic discipline and ensuring Sharīʿah compliance.
Commenting on the study, Dr Sami Al-Suwailem, Acting Director General of IsDB Institute, said:“The Ṣukūk Enhancement Fund represents a practical innovation that aligns with the core principles of Islamic finance — risk sharing, real-economy linkage and inclusion. We believe it can help unlock new opportunities for SMEs and deepen Islamic capital markets.”
Prof. Bambang P. Brodjonegoro, Dean of ADBI, added: “SMEs remain the backbone of many developing economies, yet access to long-term finance continues to be a challenge. The SEF offers a promising approach to expanding financing opportunities through market-based Islamic finance solutions.”
Supported by extensive quantitative analysis and Monte Carlo simulations, the study demonstrates the resilience of the proposed framework across a range of stress scenarios.
According to the findings, the SEF could strengthen market stability, broaden the issuer base and encourage greater participation in the ṣukūk market.
Beyond serving as a risk-mitigation mechanism, the report positions the SEF as a foundational element of Islamic capital market infrastructure, with the potential to advance financial inclusion, support private sector development and promote sustainable economic growth across IsDB member countries and beyond.
https://thecooperator.news/isdbi-announces-free-access-to-all-ebooks-during-ramadan-and-eid-al-fitr/
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