Abstract
This article examines Islamic participatory banking products, with particular emphasis on lease-to-own financing (Ijārah Muntahia Bittamlīk / Ijārah wa Iqtināʾ) as one of the most significant financing instruments used by participatory banks under Law No. 103.12 governing credit institutions in Morocco. The study highlights the importance of this product as a Shariah-compliant alternative to interest-based loans, combining financing functions with the gradual acquisition of ownership of the financed asset. The article first presents the conceptual framework of Ijārah, then analyses the specific characteristics of lease-to-own financing, which is based on two legally distinct contracts: a lease contract governing the period of use, followed by a transfer of ownership upon completion of the lease term. The paper further discusses the Shariah legitimacy of this financing structure, relying on the Qur’an, Sunnah, scholarly consensus, and resolutions of Islamic jurisprudential bodies, while emphasizing the conditions required for its validity, such as the separation between lease and sale, the absence of riba, and the genuine nature of the leasing arrangement. The study also examines the economic and legal advantages of lease-to-own financing for both the bank and the client, the formal and substantive conditions governing the contract, its legal effects, and the circumstances leading to its termination. The article concludes that lease-to-own financing plays an increasingly important role in participatory banking practice, as it successfully reconciles Shariah compliance with economic efficiency and risk management.
Recommended Citation
Samiaa, Amina
(2023)
"Financing Products of Participatory Banks — The Ijara and Acquisition Product as a Model,"
Revue Marocaine de Droit, d'Economie et de Gestion (Moroccan Journal of Law, Economics and Management): Vol. 28:
Iss.
1, Article 18.
Available at:
https://scholarhub.univh2c.ma/remadeg/vol28/iss1/18