The Acceptance of Ar-Rahnu Scheme Among Rural Population

Saad, Mohamed; Sham, Rohana; Jaffar, Haliza Hirza; Latif, Ruziah A.; Zaharum, Zaibedah; Abidin, Rabiatul Alawiyah Zainal; Abdullah, Noor Ezan; Ahmad, Zamri; Don, Mohd Ali Md; Hassan, Sallaudin; Mohamad, Wan Munirah Wan; Rasi, Raja Zuraidah Raja Mohd; Omar, Nooririnah

doi:10.1007/978-981-10-1458-1_61

Cited by 4 publications

(6 citation statements)

References 1 publication

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“…Even though there are other options to obtain cash, yet Ar-Rahnu is the most preferred by customers as it provides instant cash, has simple procedures, and is easily accessible. Although the relationship between acceptance and adoption of Ar-Rahnu has been investigated in previous studies by Amin et al (2007);Mohamad et al (2014); Salleh (2014), and Yahaya et al (2019), evidence on the link between the adoption of Ar-Rahnu and financing output is still scarce. There is a limited number of previous studies investigating the financing outcomes which involve individuals, society, and the overall economy, with the exception of Salleh (2014), Nik Azman et al (2018), andYahaya et al (2019).…”

Section: Discussionmentioning

confidence: 99%

“…Besides, Muhamad et al (2019) highlighted the importance of respecting customer's trust by maintaining a reliable and trustworthy service. Respecting customers' trust and understanding how the customer views service quality is essential in ensuring an effective relationship with customers (Mohamad et al, 2014;Mansor et al, 2014;Bedi, 2010;Abdullah, 2010;Oliver, 1994).…”

Section: Discussionmentioning

confidence: 99%

“…After the pawnbroker accepts the collateral, the fixed interest rate of two percent per month will be imposed on the customer as stated in the Pawnbrokers Act 1972, Section 17(1) (Suhana et al, 2016). The pawnbroker will then issue a pawn ticket as a proof of transaction.…”

Section: The Uniqueness Of Ar-rahnumentioning

confidence: 99%

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The Adoption of Ar-Rahnu and Financial Wellbeing of Micro-entrepreneurs in Malaysia

Azman¹,

Zabri²,

Masron³

et al. 2020

IJARBSS

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There is an urgent call for a potential justification on how and to what extent customers (microentrepreneurs) of Ar-Rahnu institutions in Malaysia are successfully driven their living standards from B10 (hardcore poverty) to B40 (low income). This study classified Ar-Rahnu's adoption factors into three categories, namely, Shari'ah governance, uniqueness of Ar-Rahnu, and efficiency. 150 questionnaires were distributed to micro-entrepreneurs that used Ar-Rahnu and analysed using SmartPLS 3.0. Based on the results, it shows that Shari'ah governance has a low correlation and insignificant relationship towards Ar-Rahnu adoption. Stated differently, it means that customers find Shari'ah-compliance requirements not as important and it does not get in their way of getting instant cash from Ar-Rahnu. The other two constructs, namely as uniqueness and efficiency, have positive relationships with Ar-Rahnu adoption. It shows a significant and positive relationship with the Ar-Rahnu financing output. Unlike previous studies within the body of knowledge that mainly focuses on the adoption factors of Ar-Rahnu, this study went a step further by addressing the after-effect or impact of Ar-Rahnu adoption towards customers' wellbeing, especially in terms of financial wellbeing and have found positive results.

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

See 1 more Smart Citation

The Adoption of Ar-Rahnu and Financial Wellbeing of Micro-entrepreneurs in Malaysia

Azman¹,

Zabri²,

Masron³

et al. 2020

IJARBSS

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“…The issue of lower service charges imposed by ar-rahnu providers was also supported by Ismail and Ahmad (1997); Hisham Sabri et al (2013) and Suhana et al (2016). These studies mentioned that ar-rahnu provides a cheaper way to obtain financing and is free from interest.…”

Section: Locality and The Usage Of Ar-rahnumentioning

confidence: 91%

Analysing ar-rahnu in the context of informal credit market theory

Azman

Kassim

Adeyemi

2018

IJIF

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Purpose This study aims to offer a new area of discourse by investigating the factors determining the usage of the Islamic non-bank financing product ar-rahnu (Islamic pawnbroking) among women micro-entrepreneurs in Malaysia within the framework of the informal credit market theory. Design/methodology/approach The study is based on primary data obtained by using self-administered questionnaires distributed in three states in Malaysia: Kedah, Kelantan and Terengganu. The questionnaires were distributed to a total of 750 participants, with each state contributing 250 respondents. Total number of respondents valid for data analysis was however 600. Findings Based on descriptive and inferential statistics by using the IBM statistical package for the social sciences and structural equation modelling analysis of moment structures, the results show that the main factor influencing women micro-entrepreneurs to use ar-rahnu is the service charge. Research limitations/implications This study only covers three states in Malaysia and is limited to examining the use of ar-rahnu by women micro-entrepreneurs in those states. Practical implications As micro-entrepreneur s often face constraints to obtaining financial access in the formal credit market, ar-rahnu provides an alternative mode of obtaining business financing to female micro-entrepreneurs, so they can sustain their operations and even expand their businesses. The significance of such factors like service fee, as revealed in this study, indicates that managers should focus on this element when offering Islamic financial products, especially to women micro-entrepreneurs. Originality/value The informal credit market theory is frequently used in conventional studies. This paper adds Sharīʿah compliance in the context of this theory as a new area to be considered when discussing Islamic financial products.

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“…This would mean that the cost of borrowing cash in an ar-rahnu is lower than conventional pawnshop. Similarly, Suhana et al (2016), Cheong and Sinnakkannu (2012), Amin (2011), Ismail andAhmad (1997) found ar-rahnu to charge a relatively lower transaction fee as compared to conventional pawnshops.…”

Section: Debated Issues On Service Chargesmentioning

confidence: 94%

Pricing practices of ar-rahnu providers in Malaysia

Azman

Kassim

2017

MEJM

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Ar-rahnu is a shariah-compliant pawnbroking instrument that has high suitability to serve short-term and immediate financial needs of the lower income people, especially the Muslims. An important component of ar-rahnu is the safe keeping/service fee on the collateral items charged by the ar-rahnu providers. This study highlights the pricing practices of selected ar-rahnu providers in Malaysia by comparing the service charges they imposed as well as the loan margins granted by each of the providers. In doing so, the study aims to provide a critical discussion on the related issues arising from the pricing practices of the ar-rahnu providers. This study hopes to shed light on the role of ar-rahnu in providing inclusive financing to the low-income group. Findings of this study contribute towards better growth of the ar-rahnu industry in particular, and the Islamic finance industry in general.

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The Acceptance of Ar-Rahnu Scheme Among Rural Population

Cited by 4 publications

References 1 publication

The Adoption of Ar-Rahnu and Financial Wellbeing of Micro-entrepreneurs in Malaysia

The Adoption of Ar-Rahnu and Financial Wellbeing of Micro-entrepreneurs in Malaysia

Analysing ar-rahnu in the context of informal credit market theory

Pricing practices of ar-rahnu providers in Malaysia

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