Convenient financing solutions for business in accordance with the principles and rules of the Sharia

Ijara is an Islamic analog of traditional leasing, under which the Bank purchases the property and sign the Lease agreement with the Customer.

During the term of leasing, the Bank will remain the full owner of the property the subject of the lease and bears all risk associated with ownership of the property.

The convenience of rental payments: the amount and schedule are agreed in the lease agreement.

The Bank offers the following types of leasing to the Customers:

• Bank leasing ending with ownership transfer for the existing property.
• Buy and leaseback ending with ownership transfer for the existing property.
• Forward Ijara ending with ownership transfer for the property under construction or to be constructed.

Consult with the Bank's service manager on applicable type of leasing and rental payment terms

How it works:                                                              

• The Customer independently identifies the subject of the leasing (property) and the seller/manufacturer of the property. The Customer applies to the Bank for financing, providing all the information about the property and the seller/manufacturer.
• The Bank reviews the terms, price and obtains written promise of the Customer for entering into the lease agreement after the purchasing of the property.
• The Bank purchases the property at its own expense from the seller/manufacturer.
• The Bank may require the Customer to make an initial payment which will be credited to the cost of the property.
• The Bank leases the property under the lease agreement to the Customer for a predetermined period. Upon delivery of the subject of the lease and the Customer start getting the benefit of usufruct* from the leased property, the Customer pays rental payments in accordance with the terms of the lease agreement. Rental payments will include the cost of the asset which is the Fixed element, the profit of the Bank which is the Variable element and other expenses which are called supplementary element.
• ​Upon expiry of the lease term and lease payments by the Customer, the Bank transfers the property’s ownership title to the Customer either by selling the property at the nominal value or through a gift agreement.

Terms according to the Sharia:

• For the existing/identical property before entering into the lease agreement, the leased property must be owned by the Bank and the rental payment would start when the property would be available for using and getting the benefit of its usufruct by the Customer.
• For a property which is not identical/existing can be concluded the forward Ijara agreement on a base of specification and description of the property before owning by the Bank. However, the rental payment would start when the property would be available for using and getting the benefit of its usufruct by the Customer. In this case, the Bank purchase through Istisna agreement** the subject of leasing in strict accordance with the specifications and description under forward lease agreement with the Customer. Upon delivery of the subject of the lease If it does not meet the description and specifications as per the lease agreement, the Customer has the right to refuse to accept leasing and to demand the corresponding item.
• The Bank may appoint a Customer as its agent for the inspection during construction and manufacturing, delivery, installation and commissioning of the asset, in order to the manufactured asset and according to specification and description of the leased property under the lease agreement.

Funding criteria:

• Any sector of the economy is financed, except for tobacco and alcohol production, gambling, the production of weapons and ammunition, and other industries that do not comply with the principles and rules of the Sharia;
• The company must have existed for at least three years. Stand-alone beginning projects are not financed, except for projects involving state and quasi-state structures;
• The project owner must contribute at least 20% of the cost of the investment project;
• The company should not have arrears in servicing banks;
• Finance terms: up to seven (7) years, depending on the type of project and the specifics of the industry; 

• Financed business should have been profitable within the last three (3) years.

*Usufruct is a benefit derived from a property being leased by a party to another with the condition a property shall not be perish.
** Istisna is a type of a sale agreement for selling a property under the production / manufacture/ construction based on a very specificified description and specification.