Islamic Finance Model

Ijarah

Leasing — the Society purchases an asset and leases it to a member.

Ijarah is a leasing arrangement: the Society purchases an asset — equipment, a vehicle, or property — and leases it to a member for an agreed rental fee over a fixed period.

Depending on the agreement, ownership either remains with the Society throughout the lease, or transfers to the member at the end of the term under an Ijarah wa Iqtina (lease-to-own) structure.

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