I always referred to sukuks as Islamic bonds. And I’m not the only one.

But what is an Islamic bond to be precise? It’s a bit of an oxymoron.

A bond is a debt instrument that pays an interest rate. If there aren’t any interest payments throughout the life of the bond - like a zero-coupon bond - then the interest is paid at maturity. ‍

But in Islam we know that a loan cannot bear interest. ‍