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Savings Charge According to Institutions Offering ar-Rahnu Services
Source publication
Since the introduction of al-Rahnu as an alternative to conventional pawnbroking for Muslims in Malaysia in 1992, there are many organizations providing this service, and al-Rahnu from year to year is growing and expanding. However, there are issues and challenges to al-Rahnu because there are still Muslims who continue to conventional pawnbroking...
Contexts in source publication
Context 1
... pawnshops collect wage charges not just to pay service providers, but also to ensure that the mortgage is secured. Refer to Table 1.0 below for a list of savings wages by institution providing al-Rahnu services. ...Similar publications
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Citations
... However, even for clients seeking to make instalment payments for their collateral, this reliance on physical visits poses challenges. It may deter clients from fulfilling payments promptly, potentially leading to delays and default to reclaim their collateral (Saiman et al., 2022;Khairunnisa, 2023;Saharan et al., 2022). Acknowledging the significance of technology in bolstering business resilience during the covid-19 pandemic, this study aims to investigate the determinant of ar-rahnu digital e-payment adoption among its users in Malaysia. ...
... After three decades of implementation, comprehensive studies revealed a remarkable surge in the proliferation of Islamic pawnshops compared to conventional pawnshop institutions in Malaysia (Saiman & Zainuddin, 2022). Azila (2011) found that the amount of loans obtained from the conventional pawnshop can reach up to 85% to 90% of the asset value. ...
This paper aims to recognize and discuss the factors influencing the intention of Muslims to participate in Ar-Rahnu offered by Islamic banks. Despite conventional pawnshops offering a higher margin to the value of collateral higher asset values in loans compared to Ar-Rahnu, there has been a noticeable increase in the demand for Ar-Rahnu over the years. The discussions attempt to create a discourse around the factors that influence the intention of Muslims to participate in Ar-Rahnu by using the Theory of Planned Behaviour plus religiosity. The findings propose conceptual frameworks that consist of components such as attitudes, subjective norms, perceived behavioral control, and religiosity as factors influencing the intention of Muslims to participate in Ar-Rahnu. However, these frameworks remain conceptual and await validation through empirical testing by future researchers. The findings of this study will provide valuable insights for Malaysian Islamic banks to enhance their Ar-Rahnu services. By aligning their offerings with Muslims' preferences and needs, Islamic banks can foster stronger relationships with their customer base and potentially attract new clientele. This review is hoped to be valuable to the present and future Ar-Rahnu scholars interested in the evolution of literature and identifying opportunities for future research. Ultimately, this paper addresses the crucial question of the factors influencing Muslims' intention to participate in Ar-Rahnu services in Islamic banks, thus contributing to the advancement of knowledge in this field.
... Ar-Rahnu involves a safekeeping/service fee charged by the providers on the collateral items. This fee is an important component of Ar-Rahnu and contributes to the financial sustainability of the providers (Azman & Kassim, 2017).The development of Ar-Rahnu in Malaysia has faced challenges, including the need for greater understanding of shariahcompliant instruments, knowledge of Islamic finance, and accessibility to Ar-Rahnu locations (Saiman & Zainuddin, 2022). However, Ar-Rahnu has received significant support in the Malaysian market, particularly among (Bahari et al., 2015). ...
... After 30 years of the implementation, studies showed that the number of Islamic pawnshops had increased more compared to the conventional pawnshop institutions in Malaysia (Saiman & Zainuddin, 2022). Additionally, the YaPEIM pawnshop service showed better acceptance by the community members with the increasing number of branches (200 branches in early 2020). ...
Al-Rahn is an Islamic pawn broking system introduced to help the needy and further develop the Islamic financial system in Malaysia. This Islamic mortgage system is an alternative system to conversational charge system. The Islamic institutions will charge a safekeeping fee to pawner good. The safekeeping fee is calculated on the basis of the pledge as wadi'ah as clearly stated in the brochure scheme by the institution concerned that the scheme is based on the principle of al-qard, al-hassan al-rahn and al-wadi'ah.The purpose of this paper is to determine whether the safe keeping fee (imposed by the financial institutions offering Islamic pawn broking facility in Malaysia) is following the Shariah compliance. A survey has been conducted to Islamic Scholars from various backgrounds using an open ended questions focusing on the safe keeping fee and the operation of the al-rahn system. Based on the findings, it was found that the al-rahn system is acceptable as truly fulfilled the Islamic Shariah in Malaysia by the respondents and by refusing any additional charges or profit taken over and above the safekeeping fees. This is because any additional charges are considered to be 'riba' which is prohibited in Islam based on Al-Quran and Sunnah.
