Filter by Categories
Accounting
Banking

Islamic Finance




Long-Term Ijarah


An ijarah in which an asset is leased for a long period of time in a way that ujrah (compensation) is fixed as a token amount in the first years of ijarah period, while the bulk of ujrah is scheduled to be paid in the last year. The term “ijarah tawilah” (the Arabic transliteration of long-term lease) was coined and introduced by Hanafis, though the majority of jurists consider this type of ijarah shari’a-compatible.

According to Hanafis, long-term ijarah is not permissible for awqaf (endowments) with maturities of more than three years. However, Malikis deemed it lawful for four years provided the leased asset is a plot of land. For Shafis and Hanbalis, the period of waqf ijarah need not be limited if there is reasonable degree of the safety of the waqf property (ain) and its usufruct (manfa’ah).



ABC
The last three decades have witnessed the modern rebirth of Islamic finance both in terms of literature and practice. Islamic banks and ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*