- The maiden Sukuk bond to have been issued in Tanzania was oversubscribed last week as investors’ appetite for assorted investment avenues remains high.
Sukuk is the Arabic name for financial certificates, also commonly referred to as sharia compliant bonds.
They are simply securities of equal denomination representing individual ownership interests in a portfolio of eligible existing or future assets.
The bond, issued by Imaan Finance Limited, was oversubscribed by 36 percent last week, market data shows.
The company sought to collect Sh2 billion, but ended up receiving a total of Sh2.72 billion in bids. With a greenshoe option of Sh1 billion, the company will take all the amount as per the agreement.
The company issued the bond to grow its loan portfolio under sharia principles.
“Though the oversubscription was not too big, it shows that there is huge demand for such investment avenues in the country,” said Fimco Limited chief executive Ivan Tarimo.
Both institutional and individual investors took part in the exercise.
According Mr Tarimo, the performance of the maiden Sukuk bond shows that there was big demand that would capture people who previously avoided investing their money in avenues that attract interest.
“It’s important that this Sikuk should not be the last in order to continue capturing people who are still interested in participation in such financial assets. It will help sharia-compliant institutions to grow their investor bases, and thus contribute immensely to inclusion endeavours,” he said.
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