All perfect praise be to Allah the Lord of The Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
Usufruct financing contracts are based on an agreement between the financing financial institution and tourism and travel companies regarding the conditions and specifications required by the client. The financing institution then purchases this usufruct (service) from the company and subsequently resells it to the client in installments, as agreed upon between the two parties.
This process is structured based on Ijarah Mawsufah fi al-Dhimmah (forward lease) and parallel Ijarah (lease). Below are the key Shariah regulations related to financing tourism and travel services:
First: The usufruct must be clearly defined: The two contracting parties must agree on the specific attributes that define the tourism and travel service.
Second: The usufruct must be of legitimate value: The service must be something considered permissible and of value according to Shariah and customary practice.
Third: Guarantee of service provision: The financier is obligated to provide the tourism and travel service to the client and remains committed to this until the end. If the service provider refuses to deliver the service to the client, the client has recourse against the financier, unless the reason for the provider's refusal is stipulated in the contract.
Fourth: No late payment penalties: The financier must not impose late payment penalties on the client in case of delayed installments, as such penalties are considered impermissible Riba (usury).
In conclusion, these contracts must be established according to the principles of Ijarah Mawsufah fi al-Dhimmah and parallel Ijarah, and both contracts must be governed by the aforementioned conditions. And Allah the Almighty knows best.
