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PDF | On Jun 15, , Abdul Ghafar Ismail and others published Ar-Rahnu – Islamic Pawnbroking. Definition of “Islamic Pawn-Broking Scheme”. A Malaysian scheme to provide interest-free loans to clients of small means. The scheme operates through. Introduction. The important of helping the needy especially the poor has long been emphasized in much of Islamic faith. Therefore, lending to.

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Therefore, by the end of 6 months, you will incur a total safe-keeping fee of RM4, Borrowers have a choice either to repay either via lump sum or by monthly installments. This equates your monthly safekeeping fee to be RM In Malaysia, Ar Rahnu is a relatively new micro credit instrument. The study employs library and archive research to achieve the objectives pawnbrokong the paper.

Please use this identifier to cite or link to this item: Step 2 — Do take note that there is a monthly safekeeping fee. Future research should study effective ways in managing challenges faced by Islamic pawn shops. The Islamic pawn broking have several advantages pawnbrkoing conventional pawn broking because it provides a cheaper way to obtain financing and is free from interest. However, if the price of gold has increased during the auction, the excess balance after deducting the principal and safekeeping will be refunded to you.

That means that there is a pawnbrking fee of RM0.

Ar Rahnu – Islamic pawnbroking in Malaysia

Ar-Rahnu; Islamic pawn broking; Micro credit instrument. Only gold and jewelry made of gold can be pawned.

Compared against conventional pawn shops and unsecured personal loans, Ar Rahnu has certain advantages:. Ar Rahnu is an Islamic Pawnbroking system which allows borrowers to use gold coins or jewellery as collateral.


Ar Rahnu – Islamic Pawnbroking –

islakic In the event the borrower cannot repay the loan, it is possible to be granted extensions of up to 3 months. Islamlc full item record. Ar Rahnu is based on these Ispamic concepts: In addition, assets pawned are guaranteed to be kept safely and there is a fair practice in auctioning and bidding. It implies that this instrument will help the community to increase economic capability of their families. Only safekeeping fees as agreed will be charged on the pledged item.

In addition, Ar-Rahnu also helps finance educational needs and provides capital to small businesses and entrepreneurs.

Isla,ic Malaysia, there are two types of agents that offer Ar Rahnu facilities: How Ar Rahnu Works? Where to get Ar Rahnu facilities in Malaysia? Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated. This means that you will receive RM65, of cash. Pawned items will be in the same condition as before When items are redeemed, there will be no problems such as shorter or lighter gold chains, which can sometimes happen with conventional pawn brokers Notice of Auction If the borrower is unable to repay the debt, they islamicc be notified of the charges and about the forced sale Surplus will be returned If the sales price exceeds the remaining debt, the excess will be returned Reasonable pawn value Although the Pawnbroker Act did not fix the par value or criteria to appraise lawnbroking pawned item, one can still expect a reasonable pawn value from institutionalized pawn brokers Conclusion If you are looking for short term loans and you have gold jewelry, you can consider Ar-Rahnu as a cheaper alternative to personal loans.

Latest Interest Rates Promotions Newsletter. If you are looking for short term loans and you have gold jewelry, you can consider Ar-Rahnu as a cheaper alternative to personal loans.


This paper aims to provide a review on Ar-Rahnu’s concept and challenges faced by Islamic pawn shops in Malaysia. This equals to an interest rate of 0. No interest riba involved Interest riba is prohibited in Islam.

If the borrowers pawhbroking still unable to repay the loan, the pawned item will be auctioned off and any surplus less outstanding amount and charges would be returned to the borrower. It is available to both islamicc and foreigners, Muslims and Non-Muslims alike, Loan tenures range from months. Ar Rahnu is useful for those who need a small loan of at least RM Ar Rahnu, also known as Ar Rahn, is Islamic pawnbroking for short-term collateralized borrowing.

At the end of the tenure, your gold will be returned to you as you pay your principal and total safekeeping fee. Why would anyone go for Ar Rahnu?

Islamic Pawnbroking (Ar-Rahnu)

Borrowers only need pay the principal plus a safekeeping fee as agreed in the agreement during the maturity date. Do take note that if you fail to pay your principal and the safekeeping fee, the bank has the right to auction off your gold. Most importantly, there is a high chance of loan being approved because this scheme is backed by gold. But if you require a longer term loan with no collateral down, pawbroking personal loan might ialamic more suitable.

Notify me of follow-up comments by email. Middle East Journal of Scientific Research.