This is why different forms of investment have been devised for the faithful; one such method is in sukuk, a bond-like product that operates on a profit share basis. Sukuk can take a range of different forms; among the most common is a sovereign bond, known as Al-Ijara. The idea behind Al-ljara is that investors purchase an asset, which is then leased back, as opposed to a traditional Western fixed-rate bond where the holders earn a predetermined amount of interest.
The UK Government was quick to realise the sizeable opportunity offered by serving the needs of the international Islamic finance market. In June 2014, the UK became the first country outside the Islamic world to issue a sovereign sukuk of £200m.
Demand in 2014 was fierce. Investors from the UK, Middle East and Asia all wanted in on the Islamic bond. Later that year Luxembourg also issued a sovereign sukuk – the first AAA-rated government to issue a euro-based Islamic bond
And then it all went a bit quiet. Hopes that the international sukuk market would enjoy exponential growth have not quite met with expectations.