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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That means that there is a safekeeping fee of RM0.

Latest Interest Rates Promotions Newsletter. The Ilamic pawn broking have several advantages over conventional pawn broking because it provides a cheaper way to obtain financing and is free from interest.

Ar Rahnu – Islamic pawnbroking in Malaysia

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. In the event the borrower cannot repay the loan, it is possible to be granted extensions of up to 3 months.

Ar Rahnu is an Islamic Pawnbroking system which allows borrowers to use gold coins pawnnroking jewellery as collateral. Future research should study effective ways in managing challenges faced by Islamic pawn shops. Click Here to Leave a Comment Below. Ar Rahnu is based on these Islamic concepts: This paper aims to provide a review on Ar-Rahnu’s concept and challenges faced by Islamic pawn shops in Malaysia.

Ar Rahnu – Islamic Pawnbroking –

Most importantly, there is a high chance of loan being pawnbrokjng because this scheme is backed by gold. Only gold and jewelry made of gold can be pawned. Step 2 — Do take note that there is a monthly safekeeping fee. Borrowers have a choice either to repay either via lump sum or by monthly installments.


Middle East Journal of Scientific Research. But if you require a longer term loan with no collateral down, a personal islamid might be more suitable.

Islamic Pawnbroking (Ar-Rahnu)

Why would anyone go for Ar Rahnu? Ar Rahnu, also known as Ar Rahn, is Islamic pawnbroking for short-term collateralized borrowing. Ar-Rahnu; Islamic pawn broking; Micro credit instrument. Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.

Where to get Ar Rahnu facilities in Malaysia? Please use this identifier to cite or link to this item: No interest riba involved Interest riba is prohibited in Islam. Therefore, by the end of 6 months, you will incur a total safe-keeping fee of RM4, Ar Rahnu is designed to adhere to Islamic laws where borrowers pay a safekeeping fee, as opposed to a compounding interest rate. It is available to both locals and foreigners, Muslims and Non-Muslims alike, Loan tenures range from months.

In addition, Ar-Rahnu also helps finance educational needs and provides capital to small businesses and entrepreneurs. Notify me of new posts by email. This equates your monthly safekeeping fee to be RM Compared against conventional pawn shops and unsecured personal loans, Ar Rahnu has certain advantages:.

In Malaysia, Ar Rahnu is a relatively new micro credit instrument. 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. In Malaysia, there are two types of agents that offer Ar Rahnu facilities: The study employs library and archive research to achieve the objectives of the paper.

This means that you will receive RM65, of cash. If the borrowers are 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.


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. 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 islsmic happen with conventional pawn brokers Notice of Auction If the borrower is unable to repay the debt, they will be notified of the charges and about the forced sale Surplus will be returned If the sales islwmic exceeds oawnbroking remaining debt, the excess will be returned Reasonable pawn value Although the Pawnbroker Act did not fix the par value or criteria to appraise the 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.

At the end of the tenure, your gold will be returned to you as you pay your izlamic and total safekeeping fee. In addition, assets pawned are guaranteed to be kept safely and there is a fair practice in auctioning and bidding.

Borrowers only need pay the principal plus a safekeeping fee as agreed in the agreement during the maturity date.