فِقهُ الإِجَارَةِ ثُمَّ البَيع — الإِيجَارُ ثُمَّ البَيع [AITAB]: هَيكَلُ تَمويلِ السَّيَّارَاتِ الإِسلَامِيِّ المَالِيزِيُّ وَكَيفَ يُبقِي الإِيجَارَ وَالبَيعَ عَقدَينِ مُنفَصِلَينِ وَالجَدَلُ حَولَ مَا إِذَا كَانَ يُحَقِّقُ الاِمتِثَالَ الشَّرعِيَّ الحَقِيقِيّ
Fiqh al-Ijara Thumma al-Bay' (فِقهُ الإِجَارَةِ ثُمَّ البَيع — Jurisprudence of Lease-Then-Sale; known commercially as AITAB [al-Ijarah Thumma al-Bay']; the dominant auto/vehicle finance structure in Malaysia; structure: [1] bank purchases the vehicle; [2] bank leases the vehicle to the customer for an agreed period at an agreed monthly rental; [3] at the end of the lease period, a separate sale agreement is executed transferring ownership to the customer for a nominal price [often RM1]; the two transactions — lease and sale — are legally distinct and documented separately; they are not combined in a single contract [which would be a 'two contracts in one' arrangement prohibited in hadith]; Shari'ah basis: both ijara [lease] and bay' [sale] are established contracts; their combination is permitted provided they are separate sequential contracts, not simultaneous combined agreements; AITAB vs. conventional hire-purchase: conventional HP combines lease and sale in one agreement; AITAB keeps them structurally separate, which allows the lease to be governed by ijara rules and the sale to be governed by bay' rules separately; Bank Negara Malaysia's Islamic Financial Services Act 2013 provides the regulatory framework; AITAB has largely been replaced in Malaysia by Islamic hire-purchase under the DFIA 2013 — but the contractual principles remain the basis for many structures; criticism: when the end-sale is pre-agreed and guaranteed, the 'separation' is formal rather than substantive) dominated Malaysian Islamic vehicle finance for over two decades.
The Structure at a Glance
Period 1 — Lease: The bank owns the car and leases it to the customer for, say, 5 years. The customer pays monthly rental. The rental is calculated such that, over the lease period, the bank recovers its cost plus a profit margin.
Period 2 — Sale: At the end of year 5, the lease terminates. A new contract is then executed: the bank sells the car to the customer for RM1 (or a nominal price). Ownership transfers.
The customer experiences this as identical to conventional hire-purchase — monthly payments, ownership at end. The Shari’ah difference is in the contractual structure: two separate documents, not one combined agreement.
Why Separation Matters: The Hadith
The Prophet said: “Two sales in one transaction (bay’atan fi bay’ah) are prohibited.” Classical jurists interpreted this as prohibiting a contract that combines two incompatible transactions in a single agreement — for instance, “I sell you X for cash now and Y on credit later” in a single binding contract.
AITAB avoids this by making the lease and sale genuinely separate: separate documents, executed at different times, with different terms. The lease is an ijara; the sale (at the end) is a bay’. Neither document requires the other to be in effect.
The Practical Criticism
The Shari’ah concern: if the sale at the end is certain — if the bank is obligated from day one to sell at RM1 — then the “separation” is a legal fiction. The economic reality is a combined hire-purchase transaction. AAOIFI and some Shari’ah boards prefer murabaha lil-amir bil-shira’ for this reason.
See also: Fiqh Al Ijarah, Fiqh Al Murabaha Al Amr Bil Shira, Fiqh Al Musharaka Al Mutanaqisa, Fiqh Al Khiyar, Fiqh Al Gharar