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.

Author: Digrel Zulunris
Country: Croatia
Language: English (Spanish)
Genre: Travel
Published (Last): 20 December 2009
Pages: 158
PDF File Size: 12.97 Mb
ePub File Size: 6.93 Mb
ISBN: 655-1-36922-237-9
Downloads: 28159
Price: Free* [*Free Regsitration Required]
Uploader: Dokus

That means that there is a safekeeping fee of RM0. Borrowers only need pay the principal plus a safekeeping fee as agreed in the agreement during the maturity date. In addition, Ar-Rahnu also helps finance educational needs and provides capital to small businesses and entrepreneurs. Borrowers have a choice either to repay either via lump sum or by monthly installments. 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.

It implies that this instrument will help the community to increase economic capability of their families. Most importantly, there is a high chance of loan being pawnbrokinv because this scheme is backed by gold. Where to get Ar Rahnu facilities in Malaysia?

Show full item record. Notify me of follow-up comments by email. The Islamic 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 is an Islamic Pawnbroking pawnbrokingg which allows borrowers to use gold coins or jewellery as collateral.

Islamic Pawn-Broking Scheme

Ar Rahnu is free from any riba and gharar element. Ar Rahnu, also known as Ar Rahn, is Islamic pawnbroking for short-term collateralized borrowing.

No interest riba involved Interest riba is pawbroking in Islam. So far, there are 2 local banks that offers the Izlamic pawnbroking scheme. Do take note that if you fail to pay your principal and the safekeeping fee, the bank has the right to auction off your is,amic. Ar-Rahnu; Islamic pawn broking; Micro credit instrument.


The study employs library and archive research to achieve the objectives of the paper. Step 2 — Do take note that there is a monthly safekeeping fee. Only safekeeping fees as agreed will be charged on the pledged item. In Malaysia, there are two types of agents that offer Ar Rahnu facilities: Compared against conventional pawn shops and unsecured personal loans, Ar Rahnu has certain advantages:. At the end of the tenure, your gold will be returned to you as you pay your principal and total safekeeping fee.

Latest Interest Rates Promotions Newsletter. In Malaysia, Ar Rahnu is a relatively new micro credit instrument.

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

Islamic Pawn-Broking Scheme –

Please use this identifier to cite or link to this item: If ispamic 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.

Only gold and jewelry made of gold can be pawned. This paper aims to provide a review on Ar-Rahnu’s concept and challenges faced by Islamic pawn shops in Malaysia.

Ar Rahnu is useful for those who need a small loan of at least RM Ar Rahnu is based on these Islamic concepts: Notify me of new posts by email. Ar Rahnu is designed to adhere to Islamic laws where borrowers pay a safekeeping fee, as opposed to a compounding interest rate. Future research should study effective ways in managing challenges faced by Islamic pawn shops.

But if you require a longer term loan with no collateral down, a personal loan might be more suitable. If you are looking isoamic short term loans pawnboking you have gold jewelry, you can consider Ar-Rahnu as a cheaper alternative to pawnroking loans.


Pawned items will be in the same condition as before When items are redeemed, there oslamic 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 will 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 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.

Click Here to Leave a Comment Below.

How Ar Pawnbroiing Works? Why would anyone go for Ar Rahnu? Middle East Journal of Scientific Research. Therefore, by the end of 6 months, you will incur a total safe-keeping fee of RM4, The introduction of Islamic pawn broking Ar-Rahnu in Malaysia is seen as a islaimc micro credit instrument. In addition, assets pawned are guaranteed to be kept safely and there is a fair practice in auctioning and bidding.

This equates your monthly safekeeping fee to be RM It is available to both locals and foreigners, Muslims and Non-Muslims alike, Loan tenures range from months. This means that you will receive Lawnbroking, of cash. Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated. This equals to an interest rate of 0.