The word itself comes from the English word “to lease”, but from an ordinary lease is significantly different because at the end of the payments the lease subject becomes your property.
Who is involved in the leasing deal?
The user of that financial service – the lessee – legal entities and individual entrepreneurs.
Lessor – a leasing company or bank that buys the equipment from the supplier and transmits this property to the lessee on the terms specified in the leasing agreement. Supplier acts as vendor or equipment manufacturer
In essence, leasing is a long-term rent of the property, followed by the right of redemption.
Ijara is a type of Islamic leasing contract, that includes the lessor and lessee where the lessor transfers the right to use certain property to the lessee for a certain time in exchange for a periodic lease payment where the lessee retains legal ownership of the property and handle legal responsibility for all risks.