Ijara Wa Iktina

(redirected from Ijarah Wa Iktinah)

Ijara Wa Iktina

A type of capital goods financing compatible with Islamic law. Under the structure, a financial institution purchases capital goods and rents them to a client. The client makes rental payments to a special account; these payments are invested and the client receives the profits. At the end of an agreed-upon period, the client purchases the goods using the rental payments in the special account. This is also used for sharia-compliant mortgages.