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Islamic Hire Purchase (Al-Ijarah Thumma Al-Bay’)

  • Mohd Ma’Sum Billah
Chapter

Abstract

Al-Ijarah is an Arabic, which means leasing, having its origins in the Islamic fiqh, while literally means to letting something on leasing or renting. Islamic principles permit the purchase of personal and real property for subsequent leasing at a mutually agreed periodic rent. Under the concept of Ijarah, the assets are rented with full maintenance. Therefore, in addition to owning an inventory of leasable assets, the lessor may also own repair and maintenance facilities. So Al-Ijarah is a contract whereby an asset is transferred from the owner, known as the lessor, to another person, known as the lessee, at an agreed-upon price called the rent, and for an agreed-upon period of time called the term of lease. There are two types of usufruct in al-Ijarah.

References

  1. Ali, A. Y. (n.d.). The Holy Qu’ran. Text and Translation.Google Scholar
  2. Bank Islam. (n.d.). Organisation and Operations Brochure (4th ed.).Google Scholar
  3. Rosly, S. A. (n.d.). Islamic Financial System and Environment. Malaysia.Google Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Mohd Ma’Sum Billah
    • 1
  1. 1.Islamic Economics InstituteKing Abdulaziz UniversityJeddahSaudi Arabia

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