Prioritisation of financing methods for military equipment projects through Islamic bonds

Securing financing for a project is a fundamental aspect of project management and has a crucial place in strategic management circles. This importance derives from the fact that staring a project without appropriate financing method would be impossible in the first-place, and moreover, choosing an inappropriate financing method is the main reason behind project delays or discontinuation of a project. In recent years, the emersion of an Islamic finance market structured around providing financial products and services based on sharia has been an important consequence of the growth of the Islamic finance sector. This has in part been made possible thanks to Islamic thinkers who by adhering to sharia norms and laws have been able to design a range of financial products in accordance with the exigent demands of Islamic societies.  This paper examines the significance and the role of Islamic bonds including, private, non-private with expected returns and non-private with definite returns. Accordingly, it identifies, analyses and prioritizes the appropriate mechanisms for financing reconnaissance equipment military projects, using the Analytic Hierarchy Process (AHP) method. This paper finds that cooperative, Istisna’a, morabeheh and rental bonds should be prioritized over other methods in national defence projects, based on their performance in four criterions; returns, risks, time horizons and financing ratio.