Models of Sustainable and Responsible Investment Sukuk as a

MODELS OF SUSTAINABLE AND RESPONSIBLE INVESTMENT SUKUK AS A POTENTIAL SOURCE OF FUNDING FOR AFFORDABLE HOUSING IN MALAYSIA

Assoc. Prof. Dr Salina Kassim[1]

Prof. Dr Engku Rabiah Adawiah Engku Ali

Dr Syed Marwan Mujahid Syed Azman

Dr Roziha Che Haron

Norizan Satar

International Islamic University Malaysia

ABSTRACT

This study focuses specifically on finding innovative financing solutions for affordable housing with the aim of providing enriching inputs to the authorities to diversify the sources of financing for the delivery and purchase of affordable houses. While currently specific measures have been undertaken towards this effort such as allowing the withdrawal of Employee Provident Fund to pay for the down-payments and monthly instalments, and the offering of relatively cheaper housing units through the RUMAWIP and PRIMA housing schemes, the issue of affordable housing, particularly to the middle-income earners are far from being resolved. Realising the vast potential of the Islamic capital market, the government launched the SRI Sukuk Framework in 2014 with the affordable housing sector being identified as one of the potential areas set to benefit from the development of the SRI sukuk. However, despite its potentials, there has been no significant development of SRI sukuk neither in terms of idea nor implementations targeted for affordable housing. This study aims at proposing the development of SRI sukuk as an innovative, sustainable and impactful source of funding which is Shariah-compliant in solving the issues of shortage of affordable housing in Malaysia. The major output expected from this study is the suggestion of several SRI sukuk models for affordable housing, and how this models can be adopted by the relevant authority to solve the issue of insufficient affordable housing in Malaysia.

Keywords: SRI sukuk, affordable housing, Islamic finance