Abu Dhabi Islamic Bank (ADIB) has become the first lender to join the UAE's recently launched retail sukuk initiative, which allows individuals to invest in Sharia-compliant government bonds in the country. Previously, only institutional investors were allowed to invest in government bonds.
Under the agreement, individual investors in the UAE can access and invest in Islamic treasury sukuk (T-sukuk) through ADIB’s Smart Sukuk platform, which allows investment in fractional bonds in smaller denominations, the Ministry of Finance said on Monday.
People can start with a minimum investment of Dh4,000 ($1,089), and invest up to Dh28,000 per transaction in increments of Dh4,000. They can also make multiple transactions, the ministry said.
UAE citizens and residents with an Emirates ID or UAE Pass can complete their registration online, fulfil KYC requirements and create a risk profile directly on the platform, while also viewing sukuk terms and transaction details.
“Through this agreement, we are providing individuals with a fully digital, Sharia-compliant investment experience that is simple, secure and designed to promote financial stability for families and the wider community," said Younis Haji AlKhoori, undersecretary of the Ministry of Finance.
The UAE ranks as the second-largest debt capital market among Gulf countries. The ministry raises money for the federal government through the issuance of dirham-denominated treasury sukuk.
The ministry said it raised Dh1.1 billion from such an auction in October. Total bids amounted to Dh4.57 billion, representing an oversubscription of 4.2 times, it said.
The UAE’s retail sukuk initiative "supports the UAE’s efforts to deepen and diversify its domestic capital market, marking another step in the implementation of its national Islamic finance strategy", said Bashar Al Natoor, global head of Islamic finance at Fitch Ratings.
“The digitalisation of sukuk – via fractional platforms and robust Sharia compliance – bolsters transparency and lowers technical barriers. Effective retail outreach will depend on investor education, seamless onboarding, and strong standards of transparency and disclosure to build trust among new participants.”
Experience from Malaysia, Indonesia and Saudi Arabia "highlights the importance of regulatory transparency and financial literacy in supporting sustainable demand and active engagement", Mr Al Natoor added.
All sukuk issued will be listed on ADIB's platform, excluding those nearing maturity, without the need for additional regulatory approvals, the ministry said.
ADIB will offer the bonds from its existing sukuk positions through primary allocations or secondary market transactions.
"By bridging the gap between institutional and retail markets, we are enabling everyone to invest in high-quality, low-risk, government-backed sukuk," said Jawaan Al Khaili, chairman of Abu Dhabi Islamic Bank.
The ministry said the agreement marks the first phase of a broader framework of partnerships with other national banks for the initiative.
The digital platforms of participating banks will enable investors to view all the sukuk details, including profit distributions, maturity dates, applicable fees and early redemption options.
"A transparent regulatory framework and preferential fee structure have also been adopted to strengthen investor confidence and encourage broader participation in the UAE’s Islamic finance ecosystem," the ministry said.
Looking ahead, sustained regulatory clarity and digital infrastructure will be crucial to building investor trust in retail Islamic finance, said Mr Al Natoor.
"Consistent monitoring of retail uptake, secondary market development, and cross-border opportunities will be essential to assess the initiative’s effectiveness in deepening market participation and supporting stable, inclusive growth in UAE retail finance.”
