What Is Ijara?
Ijara is an Islamic-finance lease arrangement in which a financier owns an asset and grants its use to a client for agreed rental payments over a term. The financier's return comes from the lease rather than from interest, and ownership of the asset stays with the financier during the lease (some structures provide for transfer of ownership at the end).
This page gives a plain-language definition; the structuring and Shariah-compliance of any particular ijara are matters for the deal's own advisers.
What is ijara?
In an ijara, the asset is owned by the lessor and used by the lessee in exchange for rental payments. The arrangement is defined by the lease contract, the asset's ownership and condition records, and the rental terms — so the documentation centres on the asset and the lease agreement.
Why ijara relates to a data room
An ijara's lease and asset documents are reviewed by the lessor, lessee, and their advisers, so the set is organised and secured in a virtual data room. The room indexes the lease and asset records and controls access across the parties. See Virtual data room for Islamic finance.
Where to go next
- Virtual data room for Islamic finance — how an ijara document set is managed.
- Sukuk · Murabaha · Mudaraba — related Islamic-finance terms.