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Tanzania’s First Sukuk Issued by Non-Financial Entity

April 8, 2024
1 minute read
Tanzania Sukuk Bond

Premier Girls Secondary School in Tanzania has become the first non-financial entity in the country to issue a Sukuk, a type of Islamic financial instrument.

Sukuk is a sharia-compliant bond-like instrument that involves a direct asset ownership interest, while bonds are indirect interest-bearing debt obligations.

The Sukuk, structured and led by Tanzanian investment advisor and securities dealer Yusra Sukuk Company, amounted to TZS 1.2 billion (approximately USD 464,707).

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It carries a five-year tenor and offers a profit rate of 8.75% per annum.

The issuance was privately placed to institutional investors, primarily financial institutions.

ZIC Takaful Company provided a guarantee covering the entire TZS 1.2 billion, minimizing investors’ risk.

The proceeds from the Sukuk issuance will fund the school’s health center, benefiting the school community and surrounding villagers.

This Sukuk issuance is categorized as socially responsible investment (SRI) Sukuk, aligning with Sustainable Development Goals (SDGs) such as good health, quality education, and gender equality.

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Additionally, it marks the first asset-backed Sukuk to originate from Tanzania, utilizing a special purpose vehicle (SPV) structure.

Islamic Bonds (Sukuk) in Tanzania

In 2021, Imaan Finance issued the first Sukuk bonds in Tanzania. The bond was approved by Tanzania’s Capital Markets and Securities Authority (CMSA).

Imaan Finance sought to collect TZS 2 billion but received a total of TZS 2.72 billion in bids, with an oversubscription of 36%, showing the country’s appetite for this product.

Want to know more about Capital Markets in Tanzania? Our upcoming Capital Markets Guide covers the Dar es Salaam Stock Exchange (DSE), listed companies, bonds, and private equity, plus the regulatory framework for investing in Tanzania’s capital markets.

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Want to know more about the Capital Markets in Tanzania? Our free overview of the Tanzania Business and Investment Guide 2026 covers the Capital Markets, plus key sectors and investment opportunities. The complete 141-page edition includes policies, taxation, key regulations, full macroeconomic data, and sources, and is also available at no cost upon completion of a short form.

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Want to know more about investing in Tanzania? Our free overview of the Tanzania Business and Investment Guide 2026 covers the economy, key sectors and investment opportunities. The complete 141-page edition, which includes policies, taxation, key regulations, full macroeconomic data and sources, is also available at no cost upon completion of a short form.

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