Al Ijarah Thumma Al Bai Meaning

Al ijarah ijarah is an arabic term with origin in islamic meaning to give something on a rental basis or wages it is islamic alternative to conventional leasing.

Al ijarah thumma al bai meaning. The word ijara means renting hiring or leasing. The essence of ijara thumma al bai. A form of ethical investments bound by the precepts of islam particularly the prohibition of interest payments. Up to 9 years.

Application of al ijarah thumma al bai in vehicle financing there has been a proposal by an islamic financial institution to introduce vehicle financing based on al ijarah thumma al bai aitab concept. Is there a distinction. Al ijarah thumma al bai aitab shariah compliant car financing based on the principles of ijarah thumma al bai which means lease followed with sale. An ijarah that outlines the terms for leasing or renting.

Thumma means to be followed by or thereafter whilst the phrase al bai refers to sales. Ijara thumma al bai synonyms ijara thumma al bai pronunciation ijara thumma al bai translation english dictionary definition of ijara thumma al bai. The principle governing an ijarah contract at the end of the lease period when the lessee buys the asset for an agreed price through a purchase contract. Ijarah muntahia bi al tamlik or al ijarah thumma al bai.

It s applicable for financing new secondhand and reconditioned motor vehicles with maximum financing tenure up to 9 years and margin of finance mof up to 90. The financing based on aitab involves two types of contracts namely leasing. Di bawah kontrak sewaan pelanggan menyewa aset tersebut dari bank pada harga yang dipersetujui sepanjang tempoh penyewaan. A basic idea about the essence of ijara thumma al bai can be had by analyzing the words that make up the name.

Ijarah thumma al bai means hire purchase it refers to how parties will enter into contracts which come into effect in a serial manner in order to form a complete lease or buyback transaction. There are several types of ijarah. Aitab adalah kontrak sewaan ijarah dan disusuli dengan kontrak jualan al bai. This involves two contracts.

Al ijarah and al ijarah thumma al bai aitab motor vehicle financing siti munirah abd wahab nur wirda ahmed 2. Kontrak syariah yang digunapakai ialah al ijarah thumma al bai aitab. Ijarah thumma al bai hire purchase in this transaction hire purchase or lease sale or financial lease the customer leases hires a good and agrees to purchase it paying in installments so that by the end of the lease it owns the good free and clear.