Ijara or Ijara: Contract, Types & Applications in Islamic Banking

The article by AIMS Education provides an in-depth explanation of Ijarah, the Islamic leasing contract used as a Shariah-compliant alternative to conventional interest-based loans. In this model, a bank purchases an asset (such as a house, vehicle, or equipment) and leases it to a client for a fixed period and price. The ownership remains with the bank, while the client pays for the right to use the asset, without any interest involved.

The article also explains Ijarah Muntahia Bittamleek, a variation where ownership is eventually transferred to the client after the lease period ends or upon final payment. This structure is especially popular in Islamic home financing and asset acquisition.

AIMS highlights the key features of Ijarah, including transparency, shared responsibility, and avoidance of riba (interest), gharar (excessive uncertainty), and haram assets. It also clarifies the roles and obligations of both lessor and lessee in maintaining ethical standards.

Overall, the article emphasizes Ijarah as a practical and spiritually sound solution for Muslims seeking halal financial alternatives in personal or business contexts.

📖 Read the full article here: https://aims.education/study-online/ijarah-in-islamic-banking/