Ijarah

Ijarah is an Islamic financial term that refers to a leasing agreement. In this arrangement, one party (the lessor) provides an asset, such as property or equipment, to another party (the lessee) in exchange for rental payments over a specified period. The ownership of the asset remains with the lessor, while the lessee gets to use it. At the end of the lease term, the lessee may have the option to purchase the asset. Ijarah complies with Islamic law, prohibiting interest (riba) and ensuring that the contract is fair and transparent for both parties.