Unlocking the Potential of Short-Term Sukuk in Pakistan: Understanding Investor Perceptions, Market Dynamics, and Policy Implications
DOI:
https://doi.org/10.67152/ijbsd.1.2.2026.23Keywords:
Islamic finance, Sukuk adoption, Shariah compliance, market liquidity, investor perception, financial literacy, PakistanAbstract
This study explores the factors influencing investor perceptions and adoption of short-term Sukuk in Pakistan, a growing Islamic finance market. This analysis examines investor perception and adoption in connection to market returns, market liquidity, Shariah compliance, perceived risks, regulatory frameworks, awareness and ease of access. Market liquidity and Regulatory frameworks moderate the relationship between independent variables and investor perceptions and adoption, while awareness mediates the effect.The study compiles primary data from 300 Pakistani financial market participants, including both institutional and private investors, using a quantitative approach. The data were analyzed using Smart PLS. The study found that market returns, Shariah conformity, and accessibility improve investor perceptions. Sukuk adoption is hindered by perceived dangers and liquidity constraints. Regulatory frameworks and market liquidity moderate the association between awareness and investing behavior, whereas awareness mediates the relationship between market returns and investor adoption. A comparison of Malaysia and Saudi Arabia's short-term Sukuk markets shows that Pakistan is struggling to build its own. Regulations, liquidity, and knowledge are the main issues. The results provide policy proposals that several stakeholders can adopt.
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Copyright (c) 2026 Dr. Syed Imran Zaman, Dr. Nayeem Ul Hassan Ansari
This work is licensed under a Creative Commons Attribution 4.0 International License.
