Somaliland Banking Association (SLBA)
Islamic Banking Products Central Bank Approved Standard

Ijara (Lease Financing)

Ijara is an Islamic lease financing model allowing customers to utilize equipment, vehicles, or property for fixed installment rentals with transfer of ownership at term.

5 min read Revised: October 2026 Ref: SLBA-SHR-IJR-2026
Ijara (Lease Financing)
Core Consumer Protection Mandate

Ijara contracts must maintain clear ownership title and asset risk with the lessor until ownership transfer is completed without penalty charges.

What is Ijara?

Ijara is providing products or services on a lease or rental basis. An Ijara contract involves the lease of items or goods for a period of time until the person is able to pay off the full value and then becomes the official owner of the good (depending on the type of lease).

How Ijara Works

This contract allows the borrower time to pay the debt in small installments for the period stated in the contract. If the person paying the lease cannot make a payment on time, no compounding interest is charged.

Ijara Muntahia Bittamleek (Lease-to-Own)

At the conclusion of the agreed lease schedule, ownership of the asset is formally transferred to the customer either through a gift deed or a nominal purchase agreement.

Ideal Use Cases

  • Machinery & Fleet Acquisition: Providing businesses with vehicles, solar power installations, or agricultural machinery.
  • Commercial Property Leases: Enabling business owners to lease corporate premises with a defined path to ultimate property ownership.
  • Medical & Technology Infrastructure: Upgrading hospitals and IT facilities with capital equipment.

Official 4-Step Consumer Dispute Resolution Protocol

If your financial transaction, fee deduction, or mobile banking request has not been satisfactorily addressed by your bank:

  1. Step 1: Direct Branch Inquiry — Lodge an official written inquiry with your commercial bank's branch manager and retain your ticket reference number.
  2. Step 2: Internal Bank Ombudsman — If unresolved within 5 business days, escalate to the accredited bank's Chief Compliance Officer or Customer Care Desk.
  3. Step 3: SLBA Consumer Secretariat — Submit a formal mediation petition via the SLBA Consumer Dispute portal (somalilandbanking.org/contact) with relevant transaction receipts.
  4. Step 4: Central Bank Regulatory Oversight — Final statutory arbitration through the Central Bank of Somaliland Supervision & Financial Integrity Division.