Abstract:
Ijārah ending with ownership is one of the Islamic financial instruments which can be utilized by
Islamic financial institutions to finance various types of assets such as consumer goods, industrial
assets, houses, and motor vehicles. Today, it is predominantly used for vehicle financing. It has been
designed by the contemporary Sharīʼah scholars to offer Sharīah compliant alternative solution for
conventional hire purchase. Since the demand for ijaīrah ending with ownership was high by
individual and corporate customers of Islamic financial institutions, it has grown in popularity in the
Islamic financial industry. Notwithstanding its popularity among the customers, there are still ongoing
deliberations on the legitimacy of this product due to its compositions. Skeptics argue that this
contract consists of multiple contractual agreements in a single contract which is prohibited in Islamic
commercial law. Therefore, this study aims to discuss the legitimacy of Ijārah ending with ownership
and its compositions from Fiqh perspective. Since this paper is exploratory in nature; the qualitative
method of study is used. The primary and secondary data were gathered through the library from the
classical literature as well as from the recent publications. The basic principles on ijārah and its
compositions are discussed from a classical fiqh point of view particularly on multiple contracts in
one contract. The study reveals that though there are certain unavoidable issues that are found, the
Ijārah ending with ownership is a sharīah compliant contract that replaces the leasing facility in the
industry and fulfills the requirements of customers.
