Jeonse-as-a-sukuk: Why is Korea a hidden champion of Islamic finance?

This study examines Korea's jeonse (key money or lump-sum deposit) system using the framework of sukuk (Islamic financial certificates), highlighting their shared characteristics as asset-backed financial instruments. Despite having origins in different cultural and legal contexts, both systems have fundamental similarities in their approach to property rights, the structure of ownership, and risk distribution. By examining how jeonse can be interpreted and adapted as a sharia-compliant financial instrument, we contribute to the literature on cross-cultural financial innovation. Our analyses provide insights into alternative housing finance models that combine conventional and Islamic financial principles, fostering opportunities for global financial collaboration. • We compare Korea's jeonse contracts to Islamic sukuk as parallel financial innovations. • We explore asset-backed housing finance through the lens of Islamic financial principles. • We reveal core similarities in financial practices across different cultures. • We offer insights into cross-cultural financial cooperation and alternatives for housing finance.