Critical success factors of implementing SRI sukuk for economic recovery post-Covid-19 pandemic

• Main Authors: Syed Azman, Syed Marwan Mujahid, Haneef, Mohamed Aslam, Engku Ali, Engku Rabiah Adawiah, Ismail, Suhaiza
• Format: Conference or Workshop Item
• Language: English; English
• Published: 2020
• Subjects: BPH Islamic Economics; BPH437 Sukuk - Islamic Bond; HG3368 Islamic Banking and Finance
• Online Access: http://irep.iium.edu.my/87203/7/87203_Critical%20success%20factors.pdf; http://irep.iium.edu.my/87203/8/87203_Critical%20success%20factors.programbook.pdf; http://irep.iium.edu.my/87203/; https://www.iium.edu.my/institute/iiibf/online-conference-isfpcps-september-2020

The COVID-19 pandemic has called for actions to “flatten” both the health and economic curves. In financial terms, this entails efforts to recover the economy from a downturn or recession, usually through fiscal or monetary stimulus. To fund this stimulus, governments typically resort to issuing bonds or sukuk in the capital market. This paper identifies and analyses the critical success factors (CSFs) of implementing SRI sukuk in Malaysia as perceived by stakeholders. Through a critical review of literature, the CSFs of SRI Sukuk were identified and utilised for an empirical questionnaire survey of two main stakeholders, developers and potential investors of SRI sukuk. The respondents were asked to rate the CSFs based on their perceived degree of importance. Generally, the respondents scored the CSFs as either “moderately important” and “important”. Overall, the top 5 CSFs ranked by respondents are: (i) Good governance framework; (ii) Fulfil ethical standards; (iii) Transparent procurement process; (vi) Well-defined scope; and (v) Viable feasibility study. It was also found that there is a significant statistical difference in how the developers and investors scored the CSFs. The findings highlight the important factors to consider when implementing SRI Sukuk. It can also serve as a reference and guideline for countries considering SRI Sukuk issuances for economic recovery stimulus post-COVID-19 pandemic.