The transformation of ijarah: From fiqh to sharia banking products

Abstract

Ijarah begins from the concept of classical fiqh as a transaction that sustains the development of Islamic banking. The wide range of banking products produced from the concept of ijarah is the basis for developing the concept of jurisprudence from classical fiqh contact to banking products in the form of financing. These developments can be seen from a large number of banking products that use ijarah contracts, especially those related to services. This development lies in the merger of ijarah contracts with several other contracts such as wakalah. Another development that exists in the path to ijarah financing is seen from the foundation. In classical fiqh concept, ijarah is a product of fiqh ijtihad which is ?anni or not binding. Every Muslim may practice the concept of jurisprudence from many scholars as ijtihad. However, in the financing of the surcharge, it is a combination of several contracts and is based on the DSN-MUI fatwa which is more binding for Islamic financial institutions on the recommendation of the Islamic banking law.