Sukuk & Wakalah
Understanding Islamic Contracts • Module 4 of 4
Sukūk (Asset-Backed Securities)
Sukūk are investment certificates representing proportional ownership in a tangible asset, usufruct, or business venture. Unlike conventional bonds (which are debt), Sukūk holders are owners and receive a share of the profits generated by the underlying asset. This platform only deals with asset-backed Sukūk, not controversial debt-based or synthetic structures.
Example: Example: Issuing certificates that represent ownership in a toll road, where certificate holders get a share of the toll revenue.
Wakālah (Agency)
An agency contract where someone (the principal) appoints an agent (Wakīl) to perform a specific task on their behalf for an agreed-upon fee. This is not a profit-sharing model. The agent is paid for their service, regardless of the outcome of the investment.
Example: Example: You appoint HalalFi as your agent (Wakīl) to manage an investment portfolio for a transparent, fixed annual fee.
Key Difference
Sukuk represent ownership in an asset, giving you a share of its profit. Wakalah is a service contract where you pay a fee for someone to manage your investment.