A Case for an Islamic Social Impact Bond

11 Pages Posted: 14 Dec 2015 Last revised: 12 Jan 2016

See all articles by Saadiah Mohamad

Saadiah Mohamad

Universiti Teknologi MARA; University of Oxford - Oxford Centre for Islamic Studies

Othmar Manfred Lehner

Hanken School of Economics - Department of Accounting

Aly Khorshid

University of Reading - ICMA Centre; UTM UNIVERSITI TEKNOLOGI MALAYSIA; LondonUni; Al Azhar University

Date Written: December 11, 2015

Abstract

While the premise of Islamic finance is often couched in the principle of maqasid al-shariah with claims to social justice and welfare, the impact and contribution to the social sector has been minimal. This paper examines the claim among critics that there is an inherent weakness in the Islamic banking and finance industry in terms of its underdeveloped social sector. We argue that to be true to its spirit, Islamic finance has to have a more inclusive role in the economy by enhancing the proliferation of shariah compliant financial products for solutions in the social sector. The paper also highlights developments of SIB (social impact bond) in the social finance space and draws parallel to similar trends in Islamic finance. The paper provides a case for structuring an Islamic SIB by highlighting the benefits of such structures.

Keywords: social impact bond (SIB), shariah compliant, maqasid al shariah, Islamic finance, social finance

Suggested Citation

Mohamad, Saadiah and Mohamad, Saadiah and Lehner, Othmar Manfred and Khorshid, Aly, A Case for an Islamic Social Impact Bond (December 11, 2015). Available at SSRN: https://ssrn.com/abstract=2702507 or http://dx.doi.org/10.2139/ssrn.2702507

Saadiah Mohamad (Contact Author)

University of Oxford - Oxford Centre for Islamic Studies ( email )

George Street
Oxford, OX1 2AR
United Kingdom

Universiti Teknologi MARA

Faculty of Business and Management
Shah Alam, Selangor 40450
Malaysia

Othmar Manfred Lehner

Hanken School of Economics - Department of Accounting ( email )

FI-00101 Helsinki
Finland

Aly Khorshid

University of Reading - ICMA Centre ( email )

Whiteknights Park
P.O. Box 242
Reading RG6 6BA
United Kingdom

UTM UNIVERSITI TEKNOLOGI MALAYSIA ( email )

UTM Skudai
813010
Johor, Johor 81310
Malaysia
+6075530692 (Phone)
+6075570815 (Fax)

HOME PAGE: http://www.utm.my

LondonUni ( email )

21 weighhouse street
London, W1Y 1YJ
United Kingdom

Al Azhar University ( email )

Cairo
Cairo, 123456
Egypt

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