May 21, 2019

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: Mazugami Doukazahn
Country: Ghana
Language: English (Spanish)
Genre: Personal Growth
Published (Last): 3 December 2009
Pages: 65
PDF File Size: 4.22 Mb
ePub File Size: 19.88 Mb
ISBN: 528-3-79090-337-9
Downloads: 20195
Price: Free* [*Free Regsitration Required]
Uploader: Mikalrajas

Do take note that if you fail to pay your principal and the safekeeping fee, the bank has ialamic right to auction off your gold.

Islamic Pawn-Broking Scheme

This paper aims to provide a review on Ar-Rahnu’s concept and challenges faced by Islamic pawn shops in Malaysia. Middle East Journal of Scientific Research. Show full item record.

Compared against conventional pawn shops and unsecured personal loans, Ar Rahnu has certain advantages:. Where to get Ar Rahnu facilities in Malaysia? Ar Rahnu, also known as Ar Rahn, is Islamic pawnbroking for short-term collateralized borrowing.

How Ar Rahnu Works? Only gold and jewelry made of gold can be pawned. At the end of the tenure, your gold will be returned to you as you pay your principal and total safekeeping fee. It is available to both locals and foreigners, Muslims and Non-Muslims alike, Loan tenures range from months. Therefore, by the end of isamic 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 practice in auctioning and bidding.

It implies that this instrument will help the community to increase economic capability of their families. 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. Notify me of new posts by email.


Islamic Pawn-Broking Scheme –

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. Step 2 — Do take note that there is a monthly safekeeping fee. In addition, Ar-Rahnu also helps finance educational needs pawngroking provides capital to small businesses and entrepreneurs.

Latest Interest Rates Promotions Newsletter. No interest riba involved Interest riba is prohibited in Islam. Most importantly, there is a high chance of loan being approved because this scheme is backed by gold. Ar Rahnu is useful for those who need a small loan of at least RM 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.

In the event the borrower cannot repay the loan, it is possible to be granted extensions of up to 3 months. Borrowers only need pay the principal plus a safekeeping fee as agreed in the agreement during the maturity date. The introduction of Islamic pawn broking Ar-Rahnu in Malaysia is seen as a new micro credit instrument.

But if you require a longer term loan with no collateral down, a personal loan might be more suitable.

Islamic Pawnbroking (Ar-Rahnu)

Why would anyone go for Ar Rahnu? In Malaysia, there are two types of agents that offer Ar Rahnu facilities: Click Here to Leave a Comment Below. Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.

Pawned items will be in the same condition as before When items are redeemed, there will be no problems such as isoamic or lighter gold chains, which can sometimes happen with conventional pawn brokers Notice of Auction Islajic the borrower is unable to repay the debt, they will be notified of the charges and about the pawnroking 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 pawnbrokijg 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.

TOP Related Articles  JBOSS RICHFACES 3.3 PDF

The study employs library and archive research to achieve the objectives of the paper. That means that there is a safekeeping fee of RM0. Notify me of follow-up comments by email. Borrowers have a choice either to repay either via lump sum or by monthly installments. Please use this identifier to cite or link to this item: Ar-Rahnu; Islamic pawn broking; Micro credit instrument.

Ar Rahnu is free from any riba and gharar element.

Ar Rahnu is based on these Islamic concepts: This means that you will receive RM65, of cash. Ar Rahnu is an Islamic Pawnbroking system which allows borrowers to pawnbrroking gold coins or jewellery as collateral.

This equals to an interest rate of 0. 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.

Only safekeeping fees as agreed will be charged on the pledged item. This equates your monthly islmaic fee to be RM Future research should study effective ways in managing challenges faced by Islamic pawn shops. So far, pawnbrokkng are 2 local banks that offers the Islamic pawnbroking scheme.