The Lease-to-Own Method in Islamic Financial Institutions to Meet Contemporary Financial Needs

Abstract

My study aimed to focus on explaining the lease-to-own contract in terms of its concept, main characteristics, regulations, components, advantages, and economic impacts. I concluded in my study that the lease-to-own contract is one of the contracts that have recently become widely used due to the need of low-income individuals for a product they cannot afford immediately. Additionally, it serves as a safe guarantee tool for the borrower, providing security for the lender as well. It also allows the tenant to benefit from the existing capital without depleting it. In this study, I reached several conclusions, the most important of which are: this form is considered modern and advanced compared to installment sales, as it differs in the timing of ownership transfer, which occurs after the lease contract expires. Furthermore, the lease-to-own contract is one of the important methods for economic growth and meets contemporary financial needs in Islamic financial institutions.