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Ijarah, (Arabic: الإجارة, al-Ijārah, "to give something on rent"[1][2] or "providing services and goods temporarily for a wage"[3] (a noun, not a verb)), is a term of fiqh (Islamic jurisprudence)[1] and product in Islamic banking and finance. In traditional fiqh, it means a contract for the hiring of persons or renting/leasing of the services or the “usufruct” of a property, generally for a fixed period and price.[4] In hiring, the employer is called musta’jir, while the employee is called ajir.[1] Ijarah need not lead to purchase. In conventional leasing an "operating lease" does not end in a change of ownership, nor does the type of ijarah known as al-ijarah (tashghiliyah).[4]
In Islamic finance, al Ijarah does lead to purchase (Ijara wa Iqtina, or "rent and acquisition") and usually refers to a leasing contract of property (such as land, plant, office automation, a motor vehicle), which is leased to a client for stream of rental and purchase payments, ending with a transfer of ownership to the lessee, and otherwise follows Islamic regulations.[4]
- ^ a b c Usmani, Introduction to Islamic Finance, 1998: p.109
- ^ "Islamic Glossary. Ijarah". Islamicity. Retrieved 19 August 2017.
- ^ Jamaldeen, Islamic Finance For Dummies, 2012:157
- ^ a b c Fatma, Asma. "MEANING OF IJARAH". academia.edu. Retrieved 21 July 2016.