What is the advantage of Sukuk compared to conventional bond?

Sukuk are often refer to as halal bonds but what are the advantages compared to conventional bonds?

Sukuk enables investors to gain profit generated by the asset

Conventional bonds consists of interest whereas sukuk does not represent debt which makes the investments less risky

The Islamic law prohibits riba therefore Sukuk enables investors to work around the prohibition outlined under Sharia and receive the benefits of debt financing.

Making profit the halal way is an advantage

Sukuk also gives a return like interest on a conventional bond however unlike a bond, Sukuk holders are granted ownership interest in the asset of the business and the return is tied to the performance of the asset in the market

You can avoid interest payments by being a sukuk holder

The obvious point to be made is that sukuk does not contain interest. It’s forbidden

It’s a much safer investment in comparison to conventional bond

Is Sukuk an islamic concept only? Or do others do it as well but name it something differently?

yaaa, it seems a lot more but investors are risking their money compared to conventional bonds right ? Where they don’t risk at all.

From a societal perspective, it seems like it can enhance communities and support small and big businesses. If these investors give their money, they also benefit and is almost risk free, although the risk is still there from what it seems.

Safer in the if you want to avoid interest and go halal but there’s risks compared to conventional bond where there aren’t any

Yeah I think it’s the lowest risk we can get investment wise without things becoming Haram

I think another benefit is that whilst bonds are based on interest and thus harm society, Sukuk enable opportunity and thus benefit society

Can you expand on what you mean by this? Are you talking about it you’re borrowing?

As in because sukuk isn’t interest based, bonds are.

I suppose it’s a risk to take if you want to do things the halal way

Yeah there’s always has to be an element of risk for it to be halal

I guess though that it is worth mentioning that not all Sukuk are halal. They need to be implemented correctly and then also maintained in a compliant manner.