The Potential of Retail Sukuk as a Financing Instrument and Government Debt Underlying Assets

Abstract

Retail Sukuk is a State Budget financing instrument issued by the government to individual domestic investors. The issuance of retail Sukuk aims to meet State Budget financing principles in the midst of global economic uncertainty. In fact, despite the various potency, the contribution of retail Sukuk in attracting new investors is relatively low, so the government still has a great opportunity to develop this instrument as a financing source. This study aims to provide a more in-depth picture of the potential of retail Sukuk in order to increase the involvement of domestic retail investors in state budget financing through SWOT analysis. We identified internal and external factors in the issuance of the financing instrument and processed them into the IFAS and EFAS matrix, SWOT matrix, and SWOT Cartesian diagram. The results indicate that retail Sukuk instruments have great opportunities for supporting government state budget financing due to the strategies obtained from SWOT analysis. We could recommend the development of retail Sukuk in an expansive strategy (S-O strategy) considering the underlying asset available in Indonesia.