Constraints and strategies for municipal Sukuk issuance in Indonesia

Imron Mawardi*, Tika Widiastuti, Muhammad Ubaidillah Al Mustofa

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


Purpose: This study aims to examine the constraints in the issuance of municipal Sukuk in Indonesia and proposed potential solutions and strategies to support its implementation. Design/methodology/approach: This study used the analytic network process (ANP) method with four groups of relevant respondents that comprised representatives from the local government, universities (academicians), experts (practitioners) and regulators. Findings: Four elements support municipal Sukuk issuance: issuer (regional government or municipality), investor, market and infrastructure. The element with the highest score was the lack of commitment from the regional government in issuing municipal sukuk due to leadership change that occurs every five years. Thus, specific regulations that strengthen and regulate municipal Sukuk issuance and the support from the central government are the priority solutions and strategies that should be undertaken to encourage regional governments in issuing municipal Sukuk. Practical implications: The establishment of specific regulations by the central government that support and strengthen municipal Sukuk issuance is necessary to promote successful implementation. Supports from the central government include tax incentives, accessible licensing processes and bureaucracy aids. Originality/value: This study extended the literature by examining problems, solutions and strategies for municipal Sukuk issuance in terms of four aspects: the issuer (municipal government), investors, markets and infrastructure. The multiple aspect analyses provided a broader understanding of the lack of municipal Sukuk issuance in Indonesia.

Original languageEnglish
Pages (from-to)464-485
Number of pages22
JournalJournal of Islamic Accounting and Business Research
Issue number3
Publication statusPublished - 11 Mar 2022
Externally publishedYes


  • Analytical network process
  • Government income
  • Municipal sukuk
  • Public finance
  • Sukuk


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