24 Nov, 2022
The Ministry of Finance of the Republic of Indonesia hosted a technical workshop on Sukuk Enhancement Fund (SEF) on 18 November 2022 in Jakarta, Indonesia. The event was organized in collaboration with IsDB Institute (IsDBI) and IsDB Regional Hub Indonesia (RHI).
This invitation-only workshop was attended by officials from the Ministry of Finance, Otoritas Jasa Keuangan (OJK), Bank Indonesia (BI), Bank Negara Indonesia (BNI), and PT SMI (Sarana Multi Infrastruktur).
The Sukuk Enhancement Fund provides a protection mechanism to Sukuk without additional costs to the issuers. It is built on the concept of cooperative insurance, whereby members contribute regular premiums and those who are affected will be compensated from the pool of contributions. Such cooperation is based on non-profit, social solidarity and risk sharing, rather than on commercial compensation.
SEF contributes to Sukuk markets by providing partial protection to investors. This protection improves the access of issuers to capital markets and potentially attracts a larger segment of Sukuk investors, enhancing the market’s diversity. The SEF can be helpful to any kind of Sukuk: Sovereign or corporate, large or SMEs, etc.
Ms. Dwi Irianti, Director of Islamic Finance at the Ministry of Finance, in her welcoming remarks, expressed her gratitude for the IsDB Institute’s proactive initiatives to introduce new ideas and products which would be beneficial to the Islamic finance stakeholders in Indonesia, particularly in their attempt to diversify players and pool of instruments so the capital market can be deepened even further.
In his opening remarks, Dr. Sami Al Suwailem, Acting Director General of the Institute, appreciated the achievements and leadership of Indonesia in the area of Islamic economics and finance, which could hopefully inspire other stakeholders in the industry to contribute to pioneering Islamic finance solutions to economic challenges.
Dr. Hylmun Izhar, Senior Economist at IsDBI, conducted the workshop and introduced the structure of SEF. After the presentation, the participants had fruitful and constructive discussions on the prospect and feasibility of the SEF for the Indonesian Sukuk market.
The participants agreed to form a task force to further investigate the feasibility of the SEF and consider alternative options for implementation.