Islamic leasing consists of indirect financing facility involving a muslim lessor and a muslim lessee who enter into an agreement where by a lessor leases a good or a service to a lessee in compliance with the islamic law.
Halal leasing follows the islamic Sharia in transfering the use of a vehicle or equipment as an asset by the lessor (the owner) to the lessee (user) for a price agreed in advance for an agreed period.
Islamic leasing or Ijara is preferably used by Muslim lessees and lessors who wants to apply this tYpe of financial operation in compliance with Islamic Finance.
Regarding Islamic leasing the differences between Ijarah and conventional leasing exist despite several similarities such as the fact that in terms of delays of payment the lessor can ask for indemnities which will paid to charity projetcs, also Ijara doesn't allow perishable goods to be leased.