What is Ijara?

Ijara is an Islamic term meaning "to give something on rent" or "providing services and goods temporarily for a wage". It’s a contract for hiring persons or renting/leasing the services or the "usufruct" of a property.

How does Ijara work?

In Ijara, the financier buys a property and leases it back to the client. The client makes rental payments and can eventually own the property.

Importance of Ijara in Islamic Finance

Ijara offers an alternative financing solution that aligns with Islamic principles. It allows individuals and businesses to use assets without outright ownership.

Different Types of Ijara

• Ijara al-Amal (Hiring/Employment): Hiring a person or service on wages.
• Ijara al-Ayn (Leasing an Asset): Leasing a property in exchange for rent.

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