An Analytical Review of Ijarah as a Shariah-Compliant Financing Model

Mohammad Rahman
2 days ago
1 min read

Published in the Journal of Positive School Psychology

The Islamic finance industry continues to expand, offering a variety of Shariah-compliant products and services. Among them, Ijarah (Islamic leasing) has gained significant importance as a practical and ethical financing tool. Derived from the Arabic root meaning "to give something on rent," Ijarah is a well-established concept with historical roots in Islamic jurisprudence.

This article is based on a research paper titled "An Analytical Study of Ijarah as a Mode of Finance in Islam", published in the Journal of Positive School Psychology. This research paper is grounded on the Sharia status of “Ijarah (leasing)”. Ijarah means giving something on rent. In ancient times, civilizations, as well as things, were very limited. Hence, leasing of goods was on a very limited scale. In this regard, a few examples of houses, camels, horses, utensils, etc., are present in the books of former scholars. In the current industrial era, where vehicles, ships, machines, factories, bridges, buildings, and even government projects inside the countries or with other countries can be included in leasing. This research article has been compiled to address the importance of this issue, its literary meaning, various terminologies used for Ijarah, as well as its justification/ non-justification described by the scholars, has been reported with research-based arguments. Also, after a thorough discussion on whether “Ijarah” is a deal or a promise, its terms and conditions are also discussed. At the end, the types of Leasing and their results/conclusions have been discussed.