Ar- Rahnu: Opportunities and Challenges in Malaysia

11 Pages Posted: 19 Jul 2012

Date Written: January 27, 2012

Abstract

This paper aims to identify the key factors that have contributed to the existence and the growth of Ar-rahnu (Islamic pawn broking scheme) in Malaysia. Based on the previous studies and cost of borrowing analysis, this paper found that the need for interest (riba) free, transparent transaction and low cost short-term cash borrowing scheme is much preferred by the pawning customers. Besides that the cost of borrowing in this scheme is the lowest compared to the conventional pawn broking scheme. However, the Ar-rahnu scheme needs to address central issues such as the marketing, public awareness and the locations of this scheme.

Keywords: Shariah principles, pawn broking, cost of borrowing

Suggested Citation

Cheong, Calvin W. H. and Sinnakkannu, Jothee, Ar- Rahnu: Opportunities and Challenges in Malaysia (January 27, 2012). Available at SSRN: https://ssrn.com/abstract=2112809 or http://dx.doi.org/10.2139/ssrn.2112809

Calvin W. H. Cheong (Contact Author)

Sunway University ( email )

Jalan Universiti
Bandar Sunway, 47500
Malaysia

Jothee Sinnakkannu

Monash Business School ( email )

Wellington Road
Clayton, Victoria 3168
Australia

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