What is Ijarah?

Ijarah (Islamic Leasing) is the most common financing instrument used by Islamic banks all over the world. IBA is currently offering Plant, Machinery and vehicle financing on the basis of Ijarah. Ijarah is a contract whereby Bank transfers right to use of Ijarah Asset to the customer for agreed period with agreed rentals. All the assets will be financed on Ijarah basis which are Shari’ah Compliant. Following are the common assets for Ijarah financing;


How does it work?

Ijarah is a rent agreement whereby the bank purchases and provides right to use assets needed by the client for an agreed fee. Ijarah is used for the financing of assets like vehicle, plant and machinery.

How will it benefit you?

The Ijarah financing mode will benefit you in the following ways:
  • Ijarah allows you to acquire assets without injecting your upfront capital and use it to generate revenues for your business.
  • A simple transaction process: Within Ijarah, you will enjoy the right to use the asset mentioned in the agreement and avail its benefits right after making the first rental payment.

To whom it is offered?



Sole proprietorships


Within Ijarah, the Islamic bank of Afghanistan offer services in four areas:

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