Groundbreaking Islamic Fintech Development in Egypt: Bokra's Pioneering Sukuk Issuance Marks a New Chapter
**Egyptian Fintech Bokra Makes Waves in Islamic Finance with Innovative Sukuk Issuance**
In a groundbreaking move, Egyptian fintech company Bokra has successfully raised 3 billion Egyptian pounds ($58.9 million) through its inaugural sukuk issuance, marking its entry into Egypt's sukuk market. This strategic move positions Bokra as a pioneering force in Egypt's Sharia-compliant financing sector and demonstrates its ability to navigate complex financial instruments.
Institutional investors, including the Suez Canal Bank, Arab African International Bank, Al Baraka Bank, Al Ahly Pharos, and SS Capital, took part in the sukuk issuance. Al Ahly Pharos acted as lead arranger and underwriter for the issuance, while legal, financial, and compliance advisory services were provided by Ali El Din Washahi, Moore, and Baker Tilly, respectively. Sharia compliance was overseen by a committee of prominent Islamic scholars.
Bokra handled the full structuring and issuance process for the sukuk, which was for Aman Project Finance, a subsidiary of Aman Holding. The sukuk issuance was structured with an 84-month term and is listed on the Egyptian Stock Exchange. The sukuk, rated BBB+ by the local ratings agency MERIS, are also backed by investments in gold, real estate, and custom financial instruments.
The novel pricing structure introduced by Bokra in its sukuk issuance is unique to the Egyptian market. Bokra's approach centers on securitizing revenue streams from state-owned assets without transferring ownership, thereby enabling Sharia-compliant project financing with enhanced liquidity and risk management. This innovative strategy could provide an alternative route for project financing in a market where high interest rates and limited credit access for Small and Medium-sized Enterprises (SMEs) are prevalent.
The government's plan, facilitated by Bokra, includes issuing a first tranche of $504 million sukuk and aims to raise up to EGP 1 trillion through such sukuk backed by Ras Shokeir land without asset sales. This contributes significantly to meeting Egypt’s growing fiscal funding requirements—projected at EGP 3.6 trillion for the next fiscal year—while reducing public debt burdens.
Bokra's model exemplifies a transformative shift in managing public assets and financing large-scale development projects in line with Islamic finance principles. It showcases how non-traditional financial instruments can generate liquidity and capital inflows without sacrificing national ownership. This could serve as a blueprint for similar sovereign and corporate sukuk issuances in Egypt and other markets seeking Sharia-compliant, asset-backed financing solutions.
The success and institutionalization of such sukuk could stimulate further innovation in related areas such as mudarabah sukuk, agricultural finance, and structured investments compliant with Islamic law, enriching the regional Sharia finance landscape. Mohamed Okasha, founder and managing partner at DisrupTech Ventures, supports Bokra due to its innovative use of investment instruments and the growing demand for alternative investment solutions.
Bokra's success in securing institutional backing while adhering to Sharia compliance could set a benchmark for future sukuk issuances in the region. Samer Sallam, Chairman of SS Capital, believes Bokra has the potential to expand beyond Egypt into other markets across the MENA region. The collaboration highlights the growing momentum in Egypt's sukuk market, following government efforts to expand Islamic finance instruments.
Bokra's innovative sukuk issuance, as a pioneering move in Egypt's Sharia-compliant financing sector, demonstrates their potential for investing in and expanding business opportunities within the market, particularly in areas like project finance and alternative investment solutions. The success of this approach could spur the development of more sukuk offerings that are compliant with Islamic law, contributing to the growth of financial inclusion and the regional Sharia finance landscape, not just in Egypt, but potentially across the MENA region.
