Leasing industry: a cursory assessment

Ijara (leasing) conforms to Islamic guidelines and is therefore a halal mode of financing. Pakistani leasing companies have affected capital formation in Pakistan since 1985. Compared to other nations their role is not large, though it is expanding. The issues limiting the growth of the Pakistani leasing industry are resource mobilization, the legislative framework, accounting standards, and competitive pressures within the industry. Capital markets in Pakistan have not formed correctly and profit only a few companies. Leasing companies must have proper incentives if they are to play a substantial role in capital formation.