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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This means that you will receive RM65, of cash.

Step 2 — Do take note that there is a monthly safekeeping fee. Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated. In addition, Ar-Rahnu also helps finance educational needs and provides capital to islamci businesses and entrepreneurs. This paper aims to provide a review on Ar-Rahnu’s concept and challenges faced by Islamic pawn shops in Malaysia.

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 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 ppawnbroking 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.


This equals to an interest rate of 0. At the end of the tenure, your gold will be returned to you as you pay your principal and total safekeeping fee. Therefore, by the end of 6 months, you will incur a total safe-keeping fee of RM4, In addition, assets pawned are guaranteed to be kept safely and there is a fair pawnnbroking in auctioning and bidding. But if you require a longer term loan with no collateral down, a personal loan might be more suitable.

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, also known as Ar Rahn, is Islamic pawnbroking for short-term collateralized borrowing.

Ar Rahnu – Islamic Pawnbroking

Latest Interest Rates Promotions Newsletter. Why would anyone go for Ar Rahnu? Ar Rahnu is free from any riba and gharar ilamic.

It is available to both locals pawnbbroking foreigners, Muslims and Non-Muslims alike, Loan tenures range from months. 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.

Middle East Journal of Scientific Research. Borrowers have a choice either to repay either via lump sum or by monthly installments. Only gold and jewelry made of gold can be pawned.

That means that there is a safekeeping fee of RM0. Show full item record. Compared against conventional pawn shops and unsecured personal loans, Ar Rahnu has certain advantages:. Please use this identifier to cite or link to this item: 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.


Ar Rahnu – Islamic pawnbroking in Malaysia

Where to get Ar Rahnu facilities in Malaysia? Borrowers only need pay the principal plus a safekeeping fee as agreed in the agreement during the maturity date. 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.

Only safekeeping fees as agreed will be charged iislamic the pledged item. The study employs library and archive research to achieve the objectives of the paper. Ar-Rahnu; Islamic pawn broking; Micro credit instrument.

No interest riba involved Interest riba is prohibited in Islam. Notify me of new posts by email. Ar Rahnu is designed to adhere to Islamic laws where borrowers pay islamiic safekeeping fee, as pawnvroking to a compounding interest rate.

Ar Rahnu is an Islamic Pawnbroking system which allows borrowers to use gold coins or jewellery as collateral. It implies that this instrument will help the community to increase economic capability of their families.