Indonesia’s BMT Bina Ummah has raised $50,000 through world’s first sukuk issuance on a public blockchain, the local media reported. It is also the world’s first micro sukuk.
The aim of BMT Bina is to have sukuk issuance on the blockchain to fund micro-SMEs and entrepreneurs. The use of blockchain is expected to reduce issuance costs and attract retail investors, according to Khalid Howladar, Chief Strategy Officer at Blossom Finance.
BMT Bina used the SmartSukuk platform introduced by Blossom Finance. According to Blossom Finance CEO Matthew Martin, the SmartSukuk platform makes micro investments accessible, transparent and tradeable — by overcoming the existing conventional barriers in financing.
Blossom Finance launched the SmartSukuk platform in May last year. The platform was launched to standardise and automate the bonds’ legal, accounting and payment systems.
The SmartSukuk platform uses ethereum smart contracts to boost efficiency and put sukuk issuance on a global scale.
BMT Bina Ummah is an Islamic micro finance cooperative based in Yogyakarta. The institution also supports micro-SMEs and entrepreneurs who do not receive conventional financing. BMT Bina general manager Arif Yuliyanto, told the media that, “The additional funds provided by this sukuk offers longer term stable funding and increases the overall amount of financing that we can offer our members.”
In recent times, Islamic finance companies are including environment-friendly and sustainable models in finance to attract all types of target audience in the Gulf and Southeast Asia.
Technologies such as blockchain and smart contracts are playing a vital role in the bonds market.