Non-Interest Banking (Episode 2)

This is Episode 2 in the series on Non-Interest Banking (NIB) and Finance, popularly known as Islamic Finance. An important development has come up that further demonstrates the commitment of stakeholders to institutionalizing and operationalizing NIB as an alternative banking and finance model in Ghana.

The Securities and Exchange Commission (SEC) has issued the first-ever guidelines on the issuance of Sukuk. The Securities Industry (Sukuk Issuance) Guidelines 2026 was issued on the 7th of September 2026.

The Sukuk guidelines set the scope and general requirements for the issuance of Sukuk, as well as the roles and responsibilities of the parties involved in a Sukuk transaction. This is an important milestone in the development of non-interest banking and finance in Ghana, as it signifies that the regulatory environment is taking shape.

What this means is that organizations or institutions that meet the requirements for the issuance of Sukuk can enter the Sukuk market and access finance for their projects.

Sukuk is a non-interest financial instrument that allows lenders to participate in the financing and ownership of an establishment in compliance with all the principles of Islamic finance. They are commonly referred to as “Sharia-compliant” bonds. Sukuk is a substitute for conventional bonds, deviating from the norm of issuing notes to subscribers at a fixed coupon rate for a fixed period of time. The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) defines Sukuk as “securities of equal denomination representing individual ownership interests in a portfolio of eligible existing or future assets”. According to the Islamic Financial Services Board (IFSB), Sukuk refers to ‘certificates that represent proportional undivided ownership in Shariah-compliant tangible assets, usufructs, or services’.

In a typical Sukuk transaction, a business approaches a bank with a proposal indicating a financial need. The bank sets up a Special Purpose Vehicle to raise funds through the sale of Sharia-compliant Sukuk notes (compliant bonds) to investors. Investors subscribe to these notes by putting in money. The money raised is then used for the investment. Ownership of the asset or investment is therefore vested in the Sukuk holders. Instead of receiving interest payments as returns on investment, investors receive a share of the profits generated by the investment or rents as owners of the investment or asset in question. Investors are regarded as owners or part owners in a Sukuk arrangement.

A Sukuk financial instrument can be modeled in many different ways. These include: Sukuk al-Murabaha, Sukuk al-Istisna’a, Sukuk al-Musharaka, Sukuk al-Ijarah, Sukuk al-Mudarabah, and Sukuk al-Istithmar. The structure of a Sukuk depends entirely on the agreed contract terms. These have been listed in the guidelines as the different types of agreements or structure under a Sukuk transaction.

In our next episode, we dive deep into the other financial instruments that are modeled based on non-interest or Islamic financial principles.