Testing the Awareness and Attitude towards Sukuk Bonds in the Kenyan Market: A Policy Brief

Abstract

The survey sought to establish the level of awareness and attitude of investors towards Sukuk bonds.   Data was collected using questionnaires among investors in the Kenyan market. A response rate of 80% was obtained from the targeted 200 respondents. In terms of awareness, 55% were aware of sukuk bonds as investment options while 45% were unaware of the Sukuk bonds.  The investors’ knowledge of sukuk bonds was tested and the findings depicted that Ijara bonds were rated the highest at 32%, Mudarabah (28.7%), Musharakah (32.8%), Murabaha (25.4%), Salam (19.7%), Istisnah (14.8%), Wakala (21.3%) and 41% had no knowledge of the types of sukuk bonds. The investors also identified factors which would influence their investing in sukuk bonds: unique features of sukuk (25.2%), transparency of investments (44.4%), religious/ ethical factor (62.9%), expected returns (42.4%), and sustainability (27.2%). This research investigated the awareness and attitude of Kenyan investors towards sukuk bonds with a view of coming with a policy framework which will guide issuance of Sukuks in Kenya.

Keywords:       Sukuk bonds, Shariah, conventional bonds