At LB Al-Salamah, we offer Ijarah, a Shari’ah-compliant leasing solution designed to meet clients financial needs while adhering to the principles of Islamic finance. Rooted in transparency, fairness, and accountability, Ijarah enables you to benefit from the use of an asset without taking immediate ownership while ensuring all transactions remain ethically sound.
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Ijarah is an Islamic leasing contract where the lessor (owner) transfers the usufruct (right to use) of an asset to the lessee for a pre-agreed rental payment, over a specified period. Unlike conventional leasing, Ijarah’s agreement emphasizes ownership responsibilities, and Shari’ah compliance that avoid interest or uncertainty.
Although Ijarah is not inherently a financing method, it is often used in structured Islamic finance by incorporating a binding promise to transfer ownership of the asset to the lessee at the end of the lease period turning it into a practical tool for asset acquisition without violating Islamic principles.
- The lessee enjoys the use of the asset (vehicle, equipment, property, etc.) while ownership remains with LB Al-Salamah (the lessor) during the lease period.
- Payments are clearly defined in advance, based on the agreed rental value not interest on borrowed money.
- In financing arrangements, the lessor may promise to transfer ownership of the asset to the lessee upon completion of the lease term, through a separate sale or gift contract.
- All Ijarah contracts and asset usage are closely monitored by LB Finance’s Shari’ah Supervisory Board to ensure full compliance with Islamic principles.
- Shari’ah-compliant leasing solution.
- No interest or hidden fees.
- Transparent structure with clear rental terms.
- Option for ownership at end of term (through a separate agreement).
- Ideal for individuals and businesses seeking ethical asset financing.
