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Pricing practices of Ar-Rahnu providers in Malaysia

Nik Azman, Nik Hadiyan and Kassim, Salina (2017) Pricing practices of Ar-Rahnu providers in Malaysia. Middle East Journal of Management, 4 (1). pp. 84-96. ISSN 2050-3644

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Abstract

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. 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 that they imposed as well as the loan margins granted by each of the providers. By doing so, the study aims to provide a critical discussion on the related issues arising from the pricing practices. This study hopes to shed lights 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.

Item Type: Article (Journal)
Additional Information: 4600/60120
Uncontrolled Keywords: ar-rahnu; financial inclusion; Islamic finance; service fee.
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
H Social Sciences > HG Finance > HG3691 Credit
Kulliyyahs/Centres/Divisions/Institutes: Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Dr Salina Kassim
Date Deposited: 28 Dec 2017 14:48
Last Modified: 21 Aug 2019 07:26
URI: http://irep.iium.edu.my/id/eprint/60120

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