The Application of Islamic Sukuk in Jordan: Possibilities and Challenges

  • Ibrahim Q. Alshomaly Department of Risk Management and Insurance Faculty of Management and Finance The University of Jordan
  • Hazem Alwadi Tafila Technical University/Jordan

Abstract

The issuance of Islamic Sukuk Law in Jordan is a step in the right direction for the liberation of the financial system from the predominance of an interest-based financial system than just a creditor to be participants in economic activity also provides opportunities for individuals who are eager to invest in Islamic financial instruments and as an engine of the Jordanian economy. Through the studying some of the economic and financial  indicators in Jordan for the period from (1998 - 2012), the study found a positive indicators support the idea of Sukuk Islamic such as the relatively high rates of savings and bank deposits as a percentage of GDP, which means providing the necessary funding for the underwriting of these instruments. But there are other indicators put this idea in a challenge in terms of its acceptance or its continuity by the financial system and investors due to the lack of confidence in the economy and to the high ratio of public debt and public deficit. Moreover, the penetration of interest-based system in the economy and the absence of efforts seriousness in fighting corruption are also another serious challenges. With all this, the activation and issuance of laws governing the reform of the financial system ,anti-corruption and increasing transparency will enhance the confidence of investors in order to accept financing of Islamic derived investments .moreover ,it necessary to  be screened the experiences of other  Muslim and non-Muslim countries who apply Islamic securitization and introduce them with  these products and their characteristics to stimulate the economic sectors to accept this Islamic project.

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Published
2017-01-01
How to Cite
ALSHOMALY, Ibrahim Q.; ALWADI, Hazem. The Application of Islamic Sukuk in Jordan: Possibilities and Challenges. Journal of Social Sciences (COES&RJ-JSS), [S.l.], v. 6, p. 53-69, jan. 2017. ISSN 2305-9249. Available at: <http://centreofexcellence.net/index.php/JSS/article/view/jss.2017.6.1.53.69>. Date accessed: 24 apr. 2019. doi: https://doi.org/10.25255/jss.2017.6.1.53.69.
Section
Articles