Kelantan breaks new ground with RM35mil social sukuk, Malaysia's first by state agency

Permodalan Kelantan Bhd has issued RM35 million in social sukuk, marking the first issuance of this type by a state agency in Malaysia and the first in Kelantan. The company's RM300 million sukuk Wakalah followed its RM265 million sukuk issuance in November 2025, both the first of their kind in Kelantan. The issuance was overseen by Maybank Investment Bank Bhd as the principal adviser, lead arranger, lead manager, and sustainability structuring adviser, with Maybank Islamic Bhd serving as the Shariah adviser and sole subscriber.

Permodalan Kelantan chairman Datuk Ahmad Yaakob stated that the issuance would provide crucial financing for expanding the company's Ar-Rahn Islamic pawnbroking business and increase access to Islamic financial services. The Ar-Rahn business, established in 1992, currently operates 35 branches across nine states. The social sukuk financing will bolster Ar-Rahn's operations and capabilities, facilitating new branch openings in high-potential areas, thereby boosting Permodalan Kelantan's income-generating potential and benefiting micro-entrepreneurs and underserved communities.

The issuance adhered to a social finance framework established by Permodalan Kelantan, which achieved a Gold impact assessment from MARC Solutions Sdn Bhd and complies with various standards including the SEC Sustainable and Responsible Investment Sukuk Framework, Asean Social Bond Standards, and ICMMA Social Bond Principles. Maybank IB deputy chief executive officer Tengku Ariff Azhar Tengku Mohamed highlighted the role of capital markets in funding social outcomes and noted Maybank's alignment with its ROAR30 targets to mobilize RM300 billion in sustainable finance by 2030.