Al Ijarah means leasing. As in a normal lease transaction, a lessor who owns the leased asset will lease it to the lessee in exchange for rental. The lessee will get the full benefit of using the lease asset within the specified period for as long as he adheres to the lease terms and conditions. At the end of the lease period, the leased asset will be returned to the lessor.
There are some other variants of leasing which incorporate the transfer or option to transfer ownership of the leased asset from the lessor to the lessee at the end of the lease period.
These are referred to as;
Al Ijarah Thumma Al Bai - Lease Agreement Incorporating Sale of Leased Asset at the end of the lease tenure.
Al Ijarah Muntahiya Bil Tamlik - Lease Agreement with option to Own Leased Asset at the end of the lease tenure
Al Ijarah Wal Iktina - Lease Agreement with option to Acquire Leased Asset at the end of the lease tenure