Ijara

 

 

 Definition

 Ijara or Islamic leasing indicates the transfer of usufruct from a particular good to another person or entity in exchange for a rent payment.

In accordance with Islamic law

  • The transaction is based on real and available assets: Rents only begin after the asset has been delivered, and can be used with all advantages pertaining thereto.
  • Risk sharing: Being the owner of the good until when the last rent is paid, we will bear the maintenance cost of the good given on lease as well as the insurance cost.

The Ijara mechanism

  • You identify and reach the vendor or supplier of the asset you need and get all the necessary information. 
  • You approach us to express the need of an Ijara operation and take an asset lease after the purchase. 

Main stages

  1. Request: you want to rent an asset. To this effect, you address us an Ijara funding request. Your funding request should bear the following information about you: area of activity, nature of the good to be rented, guarantees, etc.
  2. Approval: after examining your request and upon approval by the Islamic finance services of Afriland First Bank, you are notified about the granting of your request.
  3. Definite Undertaking: In response to our acceptance, you will write an undertaking to rent the good once it is our property.
  4. Sale of good: we promise by a deed separate from the contract to sell the good after the agreed the period and in respect of the agreement reached at the beginning. We could request you to negotiate and receive the leased good and even sign the contract with the supplier but only as a representative
  5. The contract:being owner of the good, we will sign an Ijara contract with you.  It is the main aspect and completion of the engaged procedure.