Securitization involves pooling various financial assets and issuing securities backed by those assets. Securitization of musharakah involves issuing certificates of ownership in a joint business venture that can be traded on the secondary market. Musharakah certificates directly represent ownership in project assets, unlike conventional bonds which represent a loan. Murabahah contracts cannot be securitized since they represent a monetary debt that must be transferred at par value. Ijarah contracts can be securitized by issuing certificates representing ownership in the leased asset that convey rights to rental income and liability for asset loss.

1. SECURITIZATION SHARI’AH PERSPECTIVE