(FEB NEWS) Amidst the growing growth of the Islamic financial industry, a major question has emerged: do Islamic financial instruments such as sukuk truly reach those who need them most?

This question became the starting point of a guest lecture entitled "Modeling Sukuk as an Inclusive Financial Instrument for Poverty Alleviation in Malaysia" delivered by Prof. Ts. Dr. Shafinar Ismail from the Faculty of Business and Management, Universiti Teknologi MARA, Malaysia on Wednesday (15/04/2026) at Room 207, FEB UNAIR Building.

Concerns about the rapid growth of the financial sector have not been fully matched by equitable access and economic impact for vulnerable groups. Consequently, financial inclusion remains limited to access but has not yet translated into concrete changes in well-being.

In his presentation, Prof. Shafinar emphasized that financial inclusion plays a strategic role in creating a more equitable economic distribution. Access to financial services enables people to save, invest, and manage risk.

However, he cautioned that access alone is not enough. "Financial access is the first step, but the socio-economic impact is determined by how that access is utilized," he said.

This statement is a subtle criticism of the financial inclusion approach which has so far focused more on expanding the reach of services, without ensuring their effectiveness for low-income groups.

As one of the leading instruments in Islamic finance, sukuk has long been known as a financing tool for large-scale projects, both corporate and government. However, behind this reputation lies a rarely discussed gap.
Prof. Shafinar revealed that sukuk still face structural limitations in reaching social-based financing, particularly for poverty alleviation.

Some of the main challenges highlighted include:
● Sukuk's dominant focus on large-scale projects
● High structural costs that make it unfriendly for small projects
● Lack of sukuk models that specifically target low-income groups

These conditions mean that sukuk, which should have significant potential as an inclusive instrument, are not fully optimal in addressing poverty issues.
Beyond structural aspects, other challenges arise from the institutional side. Unstandardized regulations across countries, differing interpretations of sharia, and complex compliance issues also contribute to obstacles.

"The lack of standardization creates inconsistencies in sukuk structures and increases implementation costs," he explained. As a result, innovation in these instruments lags behind the evolving needs of the sector.

He believes that the future of sukuk lies in its ability to:
● Integrate social objectives into instrument design
● Target vulnerable groups more specifically
● Prioritize cross-stakeholder collaboration

This activity ultimately invites participants to shift their perspective from initially viewing sukuk as a financial instrument to now viewing it as a tool capable of generating real social impact.

Editor: Sintya Alfafa