IBF Ijara.docx - Ijara Ijara ajr u2013 reward or wages for...

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IjaraIjara- ajr – reward or wages for work or services done.Ijara is a bilateral contract (both parties agree to do something. Two parties:1) Lessor or Muajir- owner of the asset2) Lessee or Mustajir- user of the assetOwner of the asset transfers its usufruct to the lessee for an agreed period and lessee should be able to derive benefit from it without consuming it, while ownership of asset remains with the lessor along with all risks pertaining to ownerships.Items that can be consumed cannot be leased.Physical possession is with lessee- who is not liable for any loss or destruction or reduction in of value of the asset, unless caused by misuse or intentional negligence.Consideration or rent paid by lessee to lessor- ujrah.Leased asset- majur. And the benefit derived from the asset is called Al Manfaah.Leased asset should have beneficial use and should be Halal. It should be tangible, non-perishable, valuable, identifiable and quantifiable.Perishable items like food, fuel, or even money cannot be leased. Ijara is very similar to the conventional lease. Lease of money= conventional loan.

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