Letters spacing
Line height
Default
Big
More big
Default
Black & White
Financing Ijara
Shari’ah compliant lease financing that meets your business needs
Ijara is an Islamic analog of traditional leasing, under which the Bank purchases the property and signs the Lease agreement with the client. During the term of leasing, the Bank will remain the full owner of the property (the subject of the lease) and bears all risk associated with ownership of the property. The convenience of rental payments: the amount and schedule are agreed in the lease agreement.
The Bank offers the following types of leasing to businesses
Bank leasing ending with ownership transfer of the existing property.
Buy and leaseback ending with ownership transfer of the existing property.
Forward Ijara ending with ownership transfer of the property under construction or to be constructed.
Consult with the Bank's service manager on the types of leasing and rental payment terms that best meet your business needs.
How it works?
The client independently identifies the subject of the leasing (property) and the seller/manufacturer of the property. The client applies to the Bank for financing, providing all the information about the property and the seller/manufacturer.
The Bank reviews the terms, price and obtains written promise of the client for entering into the lease agreement after the purchase of the property.
The Bank purchases the property at its own expense from the seller/manufacturer.
The Bank may require the client to make an initial payment which will be credited to the cost of the property.
The Bank leases the property under the lease agreement to the client for a predetermined period. Upon delivery of the subject of the lease, once the client starts getting the benefit of usufruct* from the leased property, the client pays rental payments in accordance with the terms of the lease agreement. Rental payments will include the cost of the asset which is the Fixed element, the profit of the Bank which is the Variable element and other expenses called the supplementary element.
Upon expiry of the lease term and lease payments by the client, the Bank transfers the property’s ownership title to the client either by selling the property at the nominal value or through a gift agreement.
*Usufruct is the right to enjoy the use of a property being leased by a party to another with the condition that the property is not destroyed or does not perish.
Financing criteria
Any sector of the economy is financed, except for tobacco and alcohol production, gambling, the production of weapons and ammunition, and other industries that do not comply with the principles and rules of the Shari’ah;
The company must be operational for at least three years. Stand-alone beginning projects are not financed, except for projects involving state and quasi-state structures;
The project owner must contribute at least 20% of the cost of the investment project;
The company should not have arrears in servicing banks;
Finance terms: up to seven (7) years, depending on the type of project and the specifics of the industry;
Financed business should have been profitable within the last three (3) years.
Shari’ah Complaint
The property must be owned by the Bank before concluding the lease contract. The rental payment should start when the property is available for use and the client can receive the benefit of its usufruct.
For a property which is not identical/not existing at the time of concluding of the lease agreement, a forward Ijara agreement can be concluded on the basis of specification and description of the property before owning by the Bank. However, the rental payment would start when the property becomes available for use and the client can receive the benefit of its usufruct. In this case, the Bank will purchase the property through an Istisna agreement** the subject of leasing in strict accordance with the specifications and description under the forward lease agreement with the client. Upon delivery of the subject of the lease, if it does not meet the description and specifications as per the lease agreement, the client has the right to refuse to accept leasing and to demand the corresponding item.
The Bank may appoint the client as its agent for the inspection during construction and manufacturing, delivery, installation and commissioning of the asset, in order to ensure the asset is manufactured according to specification and description of the leased property under the lease agreement.
** Istisna is a type of a sale agreement for selling a property still under construction based on a very specified description and specification.
Our industry expertise, innovative solutions and personalised service, make us the preferred business partner for our valued customers
In order to deliver the service you need, we would like to know more about you and your company, so please complete this form and a member of our team will contact you personally.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Scroll
