Ijarah Mawsufah fi al-Dhimmah or IMAD contract in 2024 is an Islamic financial contract that refers to a forward lease agreement, where the lessor agrees to lease an asset that is to be constructed or acquired in the future, providing a Shariah-compliant solution for financing the production or construction of assets before they come into existence.
Ijarah Mawsufah fi al-Dhimmah is distinct in its approach, as it allows for the leasing of assets not yet available, with specific descriptions and specifications agreed upon at the time of contract signing, ensuring that both parties have a clear understanding of the expected outcome.
Payments under this contract may start before the asset's delivery, based on mutual agreement, reflecting the forward nature of the lease and the commitment of both parties to the terms of the agreement.
The lessor is responsible for ensuring the asset is delivered as described and within the agreed timeframe, highlighting the importance of trust and the lessor's commitment to fulfilling the contract's terms.
Upon completion and delivery of the asset, the lease period begins, marking the transition from the promise to lease to the actual leasing phase, during which the lessee benefits from the use of the asset in accordance with the lease terms.
This contract type supports projects that require significant time for completion, such as real estate developments or manufacturing of specialized equipment, offering a financing mechanism that aligns with the principles of Islamic finance.
It emphasizes the risk-sharing aspect of Islamic finance, as the lessor assumes the risk of asset completion and delivery, ensuring that the investment meets the agreed-upon specifications and utility.
Ijarah Mawsufah fi al-Dhimmah or IMAD contract in 2024 demonstrates the adaptability of Islamic finance in meeting the needs of modern financial transactions, providing a framework for financing future assets in a manner that is compliant with Islamic jurisprudence.