What is Al Rahnu? Ar Rahnu-i is an Islamic pawn broking service that allows gold jewellery to be used as a surety against credit. The Bank will retain the gold as collateral and charge for safekeeping service. The gold will be valued at the prevailing market price and the loan amount is up to 70% of the current market value.
The safekeeping period is determined and agreed upon by both parties. At the end of the period, the loan must be paid to the Bank and the collateral reclaimed.The item maybe utilized as a payment if the debt is not repaid within the agreed period. Al Rahnu are Islamic pawn broking scheme based on Syariah principles of Al-Qard, Al-Wadiah and Al-Ujrah that provides an immediate loan facility to overcome cash-flow needs, and preventing illegal or unlicensed loan activities. Ar Rahnu The concept of Ar Rahnu 1. Al-Wadiah (savings with trust/guarantee) Al-Wadiah refers to agreement where customers deposit money in the Bank, and the Bank becomes wholly responsible and liable for its safekeeping. . Al-Mudharabah (profit-sharing) Al-Mudharabah refers to an agreement where customers deposit capital in the Bank, and the Bank becomes wholly responsible and liable in the management and investment the deposits in halal business ventures.
Profits gained will be divided and distributed accordingly, based on margins agreed upon earlier. 3. Bai-Bithaman Ajil (deferred payment sale) Bai-Bithaman Ajil refers to the sale of goods on a deferred payment basis at a price which includes a profit margin agreed by both parties. 4.Bai-Al’Inah (immediate cash) Bai-Al’Inah refers to the selling of an asset by the Bank to the customer through deffered payments. At a later date, the Bank will repurchase the asset and pay the customer in cash terms.
5. Al-Musyarakah (joint venture) Al-Musyarakah refers to a partnership or joint venture for a specific business purposes with a profit motive, whereby the distribution of profits/losses will be apportioned according to the capital contributed. 6. Qardhul Hassan (benevolent loan) Qardhul Hassan refers to an interest-free loan.The borrower is only required to repay the principal amount borrowed, but he may pay an additional amount at his absolute discretion, as a token of appreciation. 7. Al-Ijarah Thumma Al-Bai’ (hire and purchase) Refers to two contracts undertaken separately and subsequent as follows: (i) Al-Ijarah contract (hire); and (ii)Al-Bai’ contract (purchase).
Under the first contract, the customer hire the goods from the Bank at an agreed rental amount over a specified period. Upon expiry of the hiring period, the customer enters into a second contract to purchase the goods from the Bank at an agreed price.The benefit of Ar Rahnu What is more,ar-Rahnu which is presently available in Malaysiasupplies two distinct benefits for Muslimah. Firstly, it allows Muslimah to obtainquick cash for emergency and transaction purposes. Secondly, it avoids Muslimah from involving in loan-shark and interest-based loans. These merits, normally providean indication that ar-Rahnu is a promising segment of Islamic financial transactionfor women and should continuously be offered by Islamic financial institutions.Conventional-based pawnshops in Labuan and Kota Kinabalu take up a large size of the market share of the pawnshops transactions. Ar-Rahnu is relatively new among Muslimah in these places when it is compared to its conventional counterpart.
Despitethe availability of the facility in Labuan, there is a potential indication that the facilityhas remained unnoticed by customers. As such, there is a need, therefore to examinethe factors determining Malaysia Muslimah customers’ intention to use the facility.