Ijara

Ijara ( Arabic إجارة, DMG Iǧāra ; often Ijarah or Ijara ) is an Islamic financial instrument in Islamic finance that is very similar to conventional leasing .

General

In an Ijara contract, a leased item is bought from a lessor, in Arabic Mu'addjir  /مؤجر / muʾaǧǧir , to a lessee ( Musta'dschir  /مستأجر / mustaʾǧir ) for an agreed leasing rate ( Udschra  /أجرة / uǧra ) for use . Ownership of the leased item remains with the lessor for the entire term, and when it expires, the customer returns the leased item to the owner.

Both the producer of the goods and a leasing company can act as lessor.

Special features of Islamic leasing arise from the fact that all financial contracts are subject to the prohibition of interest . The Sharia forbids the collection or payment of interest ( Riba ).

It is true that foreign leasing companies pay interest on the purchase of the items in question and add this to their profit and include it in the leasing price. The lessee is not directly affected by the interest. Ijara contracts are mainly used to lease motor vehicles .

Idjara differs from Murabaha leasing as the opportunities and risks remain with the lessor and the rates are not fixed over the entire term.

Differences to traditional leasing

A big difference is that the bank has to insure the leased property because it is liable for a total loss caused by the buyer. He does not have to replace the property or pay further installments.

If a debtor fails to meet his payment obligation for no reason, it is customary in Islamic treaties to pay a fine to a charitable institution instead of default interest. In cases through no fault of your own, such as unemployment, there is no payment. This solution corresponds to the ideal of Islamic economic and social ethics, because it prevents banks from enriching themselves with default interest on a customer's plight.

Types of ijara

Ijara wa-iqtina

Ijara wa-iqtina  /إجارة واقتناء / Iǧāra wa-'qtināʾ , also Idschara wal-iqtina , is comparable to modern finance leasing . Based on an Idjara contract, the leased goods become the property of the lessee at the end of the leasing period. This is done either by paying a symbolic amount, the remaining book value or by donation. The leasing installments already paid are to be seen as a down payment.

Ijara muntahiya bi-tamlik

At Ijara muntahiya bi-tamlik  /إجارة منتهية بتمليك / Iǧāra muntahiya bi-tamlīk , the lessor, usually a bank, buys a certain asset for the lessee and leases it to him. As agreed, the lessee pays the leasing installments over the entire term of the contract and at the end purchases the leased goods at the residual book value.

Ijara thumma l-baiʿ

Ijara thumma l-baiʿ  /إجارة ثم البيع / Iǧāra ṯumma l-bayʿ refers to a leasing transaction with a purchase option after the leasing contract has expired, based on two contracts. The first contract (Ijara) regulates the leasing in a precisely defined period. When this period is over, the second contract (Baiʿ) comes into force, which regulates the purchase price and the payment methods. The lessor generates a profit by determining the cost of the good ahead of time, from its residual value at the end of the term and from the profit margin on the amount paid for the lease.

Ijara mausufa fi dh-dhimma

At Ijara mausufa fi dh-dhimma  /إجارة موصوفة في الذمة / Iǧāra mauṣūfa fī ḏ-ḏimma , mostly fi al-dhimma , a contract is concluded, whereby the lessee is assured that he can preferentially buy the goods during or after the leasing period.

References

literature

• Mustafa Ashrati: Islamic Banking - Banking and Finance aktuell. Frankfurt School, Frankfurt am Main 2008, ISBN 3-937519-85-8 .
• Hans-Georg Ebert, Friedrich Thießen, Nicole Thurner: Islamic Banking - Ways for German Banks. In: Journal for the entire credit system. No. 6, Frankfurt 2008, pp. 31-36, ISSN  0341-4019 .
• Zamir Iqbal: Islamic Financial Systems. In: Finance & Development. No. 6, Washington 1997, p. 43, ISSN  0015-1947 (PDF, 0.5 MB).
• Michael Mahlknecht: Islamic Finance. Introduction to theory and practice. Wiley-VCH, Weinheim 2008, ISBN 3-527-50389-7 .

Individual evidence

1. ↑ Islam-compliant leasing.  ( Page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. Retrieved November 24, 2009.  
2. ↑ DML circular for members and friends of the German Muslim League eV No. 4. Hamburg 2008.
3. ↑ Miachel Gassner, Jan Ph. Wieners: Islamic Finance also at the Poit of Sale. In: Bank and Market. No. 2, Frankfurt 2009, p. 41. ISSN  0341-3667
4. ↑ Miachel Gassner, Jan Ph. Wieners: Islamic Finance also at the Poit of Sale. In: Bank and Market. No. 2, Frankfurt 2009, p. 42. ISSN  0341-3667
5. ↑ The Basics of Islamic Banking.  ( Page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. Retrieved November 24, 2009.