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Definition

An investment certificate or bond which is compliant with Islamic Shariah law. South Africa has a Muslim population of approximately 2m people. In terms of Shariah law a bank may not pay interest on a debt. A sukuk is an investment certificate where the returns are generated from the profit of the underlying asset and then paid out monthly. The bank enters into purchase and sale agreements with its customers to accommodate the requirements of Shariah law. A recent example in South Africa is the raising of R200m by the Al Baraka Bank through a sukuk.

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