Ijara (Leasing) Securities

The advancement of Muslim countries and emergence of new needs and relative success of Islamic banking thought have driven the Muslim scholars to design Islamic financial instruments. The capabilities of Islamic contracts and the experience of financial markets caused in a short time a number of Islamic financial instruments to be created and suggested for application.Although not all of these instruments possess necessary jurisprudential, economic and managerial qualifications, and thus havent been able to show themselves successfully, but some of them as well heeding the criteria of Shariah, enjoy a high degree of operational capability and economic justifiability.This paper aims to introduce and explain one of these instruments that is designed based on ordinary leasing (Ijara) and leasing to own. In this instrument, by issuing the securities and giving up those, the financial institute collects funds of the people through a delegation contract, then by using those funds purchases the capital and durable goods needed by the government, its affiliated institutes, firms and households; and then gives them through ordinary leasing or leasing to own. Leasing papers especially leasing to own are regarded a kind of profitable financial instruments with an almost fixed yield; and we expect that be welcomed by normal and risk-averse individuals. In addition to improving public welfare, this instrument would increase the growth of investment and production and would be counted a suitable instrument for financial and monetary policies.